The words, sin and iniquity, are found together in some form in about 70 verses in the Bible. Many times they are used parallel to one another, as in Psalm 38:18 - "For I will declare mine iniquity; I will be sorry for my sin." Although we can be certain that they are synonyms and have the same basic meaning, there must also be something that distinguishes them. Let us consider these two words.
The word, sin, is the most general term for those actions which are wrong. One word picture looks at sin as missing the mark. If we think of this in the terms of an archer shooting for a bull's eye in a target, this may give us a good idea of the meaning of sin. He may overshoot the target. We do that when we go beyond God's allowed actions and commit what are commonly called sins of commission. That is, we do something we are not supposed to do. However, the arrow may also fall short of the mark. This would be a picture of sins of omission. This refers to the things we should have done but fail to do. The arrow might even go to the right or to the left of the target, but we are to follow God's word without turning from it to the right hand or the left hand (Joshua 1:7). Therefore, anything that comes short of the perfect glory of God (the center of the target) is sin (Romans 3:23). Sin covers all wrong doing of any sort.
In many places, iniquity also seems to be a word dealing with all kinds of sin. However, with iniquity, there is a difference. First of all, whereas sin deals with the action or lack of action that is wrong, iniquity deals more with the character or nature of the act. The word, iniquity, comes from in-equity and it refers to that which is unequal, unfair, or unjust. That explains why David in Psalm 32:5 refers to "the iniquity of my sin." His sinful actions had the character of iniquity; of being unequal.
According to "Crabb's Synonyms," iniquity in its more narrow meaning "consists of violating the law of right between man and man." The Oxford English Dictionary says that it is used especially of "wrongful or injurious actions towards another, infliction of wrong, injury." To practice iniquity is to be unjust and unequal in our dealings with others. We see this side of iniquity often in scripture. The workers of iniquity are those who eat up God's people like bread (Psalm 14:4), speak peace when mischief is in their hearts (Psalm 28:3), and lay snares for the saints (Psalm 141:9) The money Judas received for betraying Jesus is called "the reward of iniquity" (Acts 1:18).
On the other hand, God is "a God of truth and without iniquity, just and right is he" (Deuteronomy 32:4). Here, iniquity is contrasted with being just and right. We are also told that "there is no iniquity with the LORD our God, nor respect of persons, nor taking of gifts" (2 Chronicles 19:7). To show respect of persons in judgment would be unequal; so would accepting gifts as bribes. There is no iniquity with God.
Yet, although the initial emphasis of the meaning of iniquity was between man and man, we are also unequal with God. We do not return unto Him as He has done unto us. Isaiah 65:7 calls the burning of incense to false gods and blasphemies against God iniquity. We commit iniquity against God when we turn from Him to serve lesser gods. We do not treat Him right or justly when we fail to be obedient to Him. Herein lies the reason that iniquity in the Bible is so often used in a way that evidently refers to all kinds of sin. When we get right down to it, all sinful actions either treat others unjustly or they treat God unjustly. We need to come to recognize the iniquity of our sin (Psalm 32:5).
In summary, iniquity refers to that which is un-equal in our dealings with others. In earlier English, it was especially used to refer to our unequal dealings with other men. However, with time in came to include our unequal dealings with God and therefore to include all wrongdoing. However, its use in the King James Bible retains some of this earlier distinction. And, whereas the word, sin, emphasizes the wrong action itself; the word, iniquity, emphasizes the true character of that wrong action. As Isaiah declares in Isaiah 1:13, "I cannot away with; it is iniquity." Perhaps one reason the Father could not look on the Son being crucified was because of the iniquity (that is, inequity) of One who had never sinned bearing the sins of many. As Habakkuk 1:13 states, "Thou art of purer eyes than to behold evil, and canst not look on iniquity."