The other is a branch of numerical analysis that aims at approximate solution of partial differential equations. The approach taken by finite difference methods for partial differential equations is to approximate differential operators such as u'(x) by a difference operator such as (u(x+h)-u(x))/h for some small but finite h. Doing this substitution for a large enough number of points in the domain of definition (for instance 0,h,2h,...,1 in the case of the unit interval) gives a system of equations that can be solved algebraically.
The error between this approximate solution and the true solution is determined by the truncation error that is made by going from a differential operator to a difference operator. The term "truncation error" reflects the fact that a difference operator can be viewed as a finite part of the infinite Taylor series of the differential operator.