Nanites are Microscopic machines, usually built with a specific purpose in mind, but they rarely work individually. They are simple machines, with a limited intelligence. They can construct preprogrammed items out of available materials, or use manipulators to alter their environments.
In order to get around the problem of the Nanite's limited intelligence, some are built with no individual intelligence, relying instead on a seperate computer system. In other cases Nanites use a combined intelligence, or a hive mind. If nanites are able to develop an inter linked, hive-like mind, their intelligence grows based on how many nanites there are. That means they can possibly develop into a self aware amalgamation capable of independent thought.
They can be injected into people to heal bodily injuries by reconstructing damaged tissue cell by cell, to augment the body by acting as limited life support. They can interact with the brain, supplementing brain functions... Providing translation, for example. They are also able to reconstruct DNA if given the time to infiltrate enough cells. Most Nanites are coated so as to avoid the attention of a bodies immune system... but some times being injected by nanites can result in the symptoms of a bad infection.
Nanites can also be inserted into machinery or computers to maintain and perform upgrades, in much the same way they would in an organic body.
Nanites can be as destructive as they can be helpful, programing viruses (either computer, or organic), or literally tearing their host apart from the inside out, or even reconstructing it into something completely different.
Nano-machines are composed of no less than millions of nanites, and a central computer control system. The individual nanites are not preprogrammed, as they are when used as "nanites." The nanites work together in large groups, all controlled by the computer.
The additional abilities of Nano-machines includes the ability for the nanites to cling to each other to form shapes, and simple machines. Spears, swords, scissors, mallets are all possible... the tools formed are able reform into something else even as it is put into use.
When the Nano-machines is dormant, it appears to be a pile of sand or dust. When active, the nano-machine is able to accurately simulate virtually any substance, including flesh... complete with hair and pulse.
Some of the more advanced AI control systems can develop multiple personalities, some of which may not even realize that they are part of a larger machine, or even that they are artificial.
Liquid metal is a more advanced form of the nano-machine. It can operate as part of another machine, or independently. It does away with a central control computer by dividing control among the nanites composing it.
The nanites are also more tightly united, which is responsible for the "liquid metal" look that it maintains even while off-line, this also takes away the ability for the nanites to create mechanical joints... Liquid metal can only assume the form of organic or solid bladed objects.
It is possible for a liquid metal machine to compensate for the disadvantage of not being able to form machines with moving parts by storing the necessary components. However if one of the necessary components is damaged (such as a blaster power core) then liquid metal can not use it until repairs are made.
Like nano-machines liquid metal is also able to alter itself to resemble any surface, but is also able to reconstruct raw materials in order to repair any nanites that may become damaged.
It is very destroy liquid metal permanently. Liquid metal can only be rendered totally inoperative, inoperative two ways. 1) Turn it off [not easy if you did not program it in the first place]. 2) damage it and keep damaging it faster than it can repair itself, until enough of the nanites are gone that it no longer has a functioning operating system [also very difficult, and nearly impossible with most firearms, but can be accomplished with freezing the entire thing, melting the entire thing, or dropping an atomic bomb on it.]