Makeup and costumes are part of the "mise en scene," or the aspects of movies that form the composition of the shot. Other elements of mise en scene include the set design, the lighting, the position of the camera and the movement of the actors. Makeup and costumes are an extremely important aspect of that because they help establish the film's overall look, which in term contributes to the mood and tone the filmmakers hope to establish.
Makeup is broadly defined as anything applied to the actor's face or skin to achieve a certain look. All actors wear makeup in front of the camera, though it is often very subtle and designed simply to help them look their best. Some types of makeup are used to convey specific features about the character (for example, the prosthetic nose worn by Nicole Kidman when she played Virginia Woolf in the movie "The Hours"). In its most extreme form, makeup can be used to convey traumatic wounds or even transform an actor into an alien or inhuman creature.
Costumes are similarly defined as outfits worn by the actors while they are in character. They can include jewelry and props such as belts or knapsacks in addition to proper clothing. In strictest terms, costumes help convey a sense of character--what this person might wear in day-to-day life--and actors often help pick out costumes that they feel best reflect that character. Costume designers must not only find the right costumes, but they also must often age or alter them to fit into a certain scene. For example, costume designer Deborah Nadoolman artificially aged a new leather jacket for Harrison Ford to wear in "Raiders of the Lost Ark." Nadoolman used wire brushes and a pen knife to convey the sense that he had been wearing the jacket for years.
Both makeup artists and costume designers have major jobs. Not only must they apply their skills to the principal performers, but they must also dress and apply makeup to any extras who appear in the background. This can be a large job--consider, for example, the makeup and costumes used for the monsters in "The Lord of the Rings." They often appear as nothing more than background imagery, never even coming into focus, and yet dozens or even hundreds of them had to be dressed and made up to fit the period and overall tone of the film. Otherwise, embarrassing gaffes may occur. (One ancient epic from the 1960s features a lamentable mistake: an extra playing a Roman legionnaire can be seen sporting a wristwatch.)
Makeup artists and costume designers must often work in tangent with other members of the production team. Their knowledge of color and composition comes into play as the actors move through the set: interacting with the lighting, the set design and the other actors to produce a compositional effect. If the actor's costume or makeup doesn't blend in well with the surrounding details, the scene will look awkward or badly composed. Conversely, makeup or costumes that fit in well with the lighting and compositional style will contribute to an excellent look. Consider, for example, the pale makeup and black outfit worn by actor Kate Beckinsale in the "Underworld" films. Not only do they contribute to her character (she plays a vampire), but they also allow her face to stand out from the gloomy surrounding material, drawing the audience's eye to it during a scene.
Besides contributing to the pure look of the piece, makeup and costumes can add thematic contributions--sometimes very subtle--which can help convey the film's overall vision. Semantic signs convey details about the character (a slob in a dirty shirt, for example), establish the plausibility of a fantastic universe (such as aliens in outer space) or provide thematic undercurrents that enhance and accentuate the drama. Consider, for instance, the costumes and makeup used in Bram Stoker's "Dracula." They were designed to convey the idea of different animals, signaling Count Dracula's control over creatures such as bats and wolves.