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Relays can switch either AC or DC loads with either a AC or DC signals and are electrical/magnetic/physical devices. They're great specifically for using small (but not nearly as small as a transistor) signals to switch higher powered AC or DC loads. Relays are highly reliable but mechanical and limited in switching cycles and prone to mechanical failure towards the end of their life or if abused.
Transistors switch DC current ONLY with applied DC voltages ONLY, and have many advantages and disadvantages compared to a relay.
Your question is difficult to answer unless you state the particular application you're interested in, an overall view would be problematic because there are so many different advantages and problems in various situations, in some case a relays is cheap and perfect, in others it simply wouldn't be possible to use one.
No, their mechanism is however the change in the conduction state of a material based on nearby electric field potentials, not physically moving objects slapping conductors together. The original poster however was not talking about solid state relays which are entirely different altogether. He was asking specifically about the transistor vs a mechanical relay. At least that's how I read it, I would hope the poster would correct me if I'm wrong in that reading.
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