The word 'Nutraceutical' is a combination of the words 'nutrient' and 'pharmaceutical', clearly describing the relation 'nourishing components of food' have with 'medicine'. Stephen L. DeFelice, who coined this word, defines nutraceutical as 'food or parts of food, that provide medical or health benefits, including the treatment of disease'. More precisely speaking, nutraceuticals are medicinally active nutrient-rich foods or drugs. Nutraceuticals are commonly delivered in the form of 'Dietary Supplements' or 'Functional Foods'. Dietary supplement, as the name suggests, enhance your diet acting as nutrition additives. Functional Foods, on the other hand, are products that are fortified or enriched with complementary nutrients during processing, modified into physically or medicinally beneficial foods.

References
Wikipedia: Nutraceutical
The Pharmaceutical Journal: What is a nutraceutical?
News Medical Life Sciences: What are Nutraceuticals?