In multistage sampling, you select an initial (first-stage) sample that is based on groups of elements in the population, which are called primary sampling units (PSUs).
Then you create a second-stage sample by drawing a subsample from each selected PSU in the first-stage sample. By repeating this operation, you can select a higher-stage sample. If you include all the elements from the selected primary sampling units, then the two-stage sample is a cluster sample.