Definition
Sanction is a famously two-faced word: it can mean official permission to do something, or an official penalty for doing something wrong. Both senses come from Latin sancire, 'to make binding', and that is the thread — an authority makes its will binding, whether by approving an act or by punishing one. As a verb it usually means to approve ('the board sanctioned the plan'); as a plural noun it usually means penalties ('trade sanctions'). Context, and grammatical number, tell you which face you are seeing.
Examples
Collocations
impose sanctions·economic sanctions·lift sanctions·officially sanction·sanction a plan
Synonyms
approve·authorize·endorse·penalty·embargo
Antonyms
ban·prohibit·veto
Word family
sanctioned (adjective)·sanctioning (noun)
In TOEFL & IELTS
A genuine contranym and a favourite trap: the verb tends to mean 'approve', while the plural noun 'sanctions' almost always means 'penalties'. Learn it through collocations — impose / lift / tighten sanctions for the penalty sense, 'officially sanction' for the approval sense. Very common in IELTS reading on international relations and law; let the surrounding words disambiguate it.