The word sanction has two nearly opposite meanings, which can be confusing:

1. To officially approve or permit something. When a school sanctions a club, it gives official permission for the club to exist and meet. When a government sanctions a policy, it formally authorizes it. This meaning suggests legitimate authority: a teacher might sanction a field trip, or a coach might sanction a new training method for the team.
2. To impose a penalty or punishment, usually by a government or organization. When countries sanction another nation, they restrict trade or freeze bank accounts to pressure that nation to change its behavior. A student might face sanctions for breaking school rules, like detention or loss of privileges. In this sense, sanctions (the noun form) are the actual penalties: “The United Nations imposed economic sanctions on the country.”

The key to understanding which meaning applies is context. If something receives official approval, it has been sanctioned in the first sense. If someone is being punished or restricted, they face sanctions in the second sense.