The term Space Complexity is misused for Auxiliary Space at many places. Following are the correct definitions of Auxiliary Space and Space Complexity.
Auxiliary Space is the extra space or temporary space used by an algorithm.
Space Complexity of an algorithm is total space taken by the algorithm with respect to the input size. Space complexity includes both Auxiliary space and space used by input.
We can also say that the way in which the amount of storage space required by an algorithm varies with the size of the problem it is solving. Space complexity is normally expressed as an order of magnitude, e.g. O(N2) means that if the size of the problem (N) doubles then four times as much working storage will be needed.
For example, if we want to compare standard sorting algorithms on the basis of space, then Auxiliary Space would be a better criteria than Space Complexity. Merge Sort uses O(n) auxiliary space, Insertion sort and Heap Sort use O(1) auxiliary space. Space complexity of all these sorting algorithms is O(n) though.