Populous, meaning having many inhabitants, is always an adjective. Populace is a noun referring to a population or the general public. So we might say, for example, that a populous city has a large populace.
But while populace is roughly synonymous with population, the words’ connotations differ slightly. Population is neutral, while populace often carries a superior tone toward the group it refers to.
Examples
Unfortunately, he’s forgotten how to speak German, and the populace can’t understand his heavily accented English. [Los Angeles Times]
The question now is whether it is capable of carrying the most populous Arab state toward new territory. [Wall Street Journal]
The country has undergone a traumatic period in the last three months with an absentee President and a restless populace. [All Africa]
The result leaves the city the second-most populous in the state, with a population behind Little Rock’s 193,524. [Times Record Online]