What is the difference between "institutional" and "institutionalized"?
In AmE, "institutionalized" is what happens to people who are hopelessly insane.
I would say that institutionalization happens to people who are insane. And with institutionalization, they become institutionalized. This might seem a fine point except that the OP is having trouble with different forms of the base word.
Of course, another difference is that institutional is an adjective, while institutionalized is a verbal form (and sometimes also an participial adjective).
As adjectives, the way they are used should be able to be worked out from the way they are formed.