In plain language
A touch is player contact with the ball. A pass completes when another player touches the ball sent to them. Drop means a fall or incomplete pass under the rule. Hand is a separate infraction.
In practice
P1 sends the ball and P2 touches it: P1’s pass completed. If P2 then drops it, that fall does not undo the earlier pass. Authorised hand introduction to start or restart is not an infraction.
Read the official rule for this topic
Touch, Pass, Drop and Hand
DEFINITION. A Touch occurs when a Player contacts the ball. A Pass is the transfer of the ball from one Player to another. A Pass is complete when the other Player touches the ball. A Touch without a completed Pass is an incomplete Pass, represented by Drop under the approved sporting semantics.
EXAMPLE. If P1 passes to P2 and P2 touches the ball, P1's Pass is complete. P2's subsequent Drop does not make P1's completed Pass incomplete.
LAW. Drop penalties are -750 for the first Drop and -500 for each of the second, third, fourth and fifth Drops. The fifth Drop also ends the Set. Hand is a separate infringement with a -1500 penalty. Hand is not a Touch, Drop or RED Execution. The authorized hand introduction is not an infringement.