An indicator is a chemical that changes colour depending on the pH of a substance.
Litmus paper: is used to determine whether a substance is an acid or a base. It does not tell us the pH of the substance.
Red litmus paper turns blue in the presence of a base.
Blue litmus paper turns red in the presence of an acid.
If you use both red and blue litmus paper to test one solution and they remain their original colour, i.e. red litmus stays red and blue litmus stays blue, then the solution is said to be neutral.
Universal indicator: is used to determine the pH of a substance.
By changing colour when added to your solution, the colour can be compared to the pH scale which allows us to find the pH.