A tar file is the concatenation of one or more files. Each file is preceded by a 512-byte header record. The file data is written unaltered except that its length is rounded up to a multiple of 512 bytes and the extra space is zero filled. The end of an archive is marked by at least two consecutive zero-filled records.
GZIP compresses a single file into another single file, but does not create archives.
...Although its file format also allows for multiple such streams to be concatenated (zipped files are simply decompressed concatenated as if they were originally one file), gzip is normally used to compress just single files.[4] Compressed archives are typically created by assembling collections of files into a single tar archive, and then compressing that archive with gzip.
Gzip gzip is based on the DEFLATE algorithm, which is a combination of LZ77 and Huffman coding. It's a lossless data compression algorithm that works by transforming the input stream into compressed symbols using a dictionary built on-the-fly and watching for duplicates. But it can't find duplicates separated by more than 32K. Expecting it to spot duplicates 1MB apart isn't realistic.
Best Answer
TAR creates a single archived file out of many files, but does not compress them.
Format Details
GZIP compresses a single file into another single file, but does not create archives.
File Format