challenge vs defy

challenge is a noun but defy is not a noun.

Word	Noun	Adjective	Verb	Adverb
challenge	Yes	No	Yes	No
defy	No	No	Yes	No

As verbs, defy is a hyponym of challenge; that is, defy is a word with a more specific, narrower meaning than challenge:

challenge (noun)	defy (noun)
a call to engage in a contest or fight
questioning a statement and demanding an explanation
a formal objection to the selection of a particular person as a juror
a demand by a sentry for a password or identification
a demanding or stimulating situation

challenge (verb)	defy (verb)
issue a challenge to	challenge
take exception to	resist or confront with resistance
raise a formal objection in a court of law	elude, especially in a baffling way
ask for identification