A membership in an organization that requires a lengthy qualification process could certainly be listed under the "Honors and Awards" heading on a college application, although it could be called an extracurricular, too. However, the typical student has more extracurriculars than can fit on an application but not enough honors to fill all of those spaces. So, in such cases, it makes sense to count membership in a selective organization (such as the International Thespian Society) as an honor, which leaves more spaces in the Activities section, where they are probably needed.
Often the lines between activities and awards or honors can be blurred, and college admission officials understand this. So don't stress over where your various undertakings end up on the application. The most important thing is to let the admission folks see what's important to you and what you've achieved, without splitting hairs over exactly how that transpires.
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