The Sacrament of Holy Orders has been set up by Christ to provide ministers of service to His people, the Church. All people who have received Holy Orders are members of a college (an assembly) dedicated to service. Since the purpose of Holy Orders is so vast, the sacrament is given on three different levels, with differing powers and authorities.
Bishops are the highest level of the Holy Orders. They participate in the priesthood of Christ. The main power they have over priests is the ability to ordain deacons, priests, and other bishops. They are the successors of the apostles and members of the college of bishops, which has the Pope at its head. The normal role of a bishop is to head a local Church, which is called a diocese.
Priests, whose role is to assist and obey the orders of the bishop, often care for communities of the faithful. They have the ability to administer the Sacraments of Reconciliation (Confession and Anointing of the Sick), Eucharist, Baptism, as well as Confirmation when authorized by the proper authority.
Deacons are ministers of the Gospel but cannot consecrate the Eucharist, hear Confessions or Anoint the Sick. They are ordained to perform acts of service and charity. Deacons have the faculties to witness marriage vows, baptize infants, proclaim the Gospel, preach and administer Viaticum.
Source: Introduction to Catholicism, A Complete Course, The Didache Series,
Midwest Theological Forum, Woodbridge, Il., p 213