The differential is a gear system within the final drive which allows the driving wheels to turn at different speeds in a corner.
The inner wheel is closer to the apex of a corner, with a smaller radius of turn, so it travels a shorter distance than the outer wheel. A differential is needed to ensure that both wheels can drive the car while still being able to travel different distances in the corner.
A normal or 'open differential' allows one wheel to be stationary while the other continues to rotate. An open differential can cause a loss of grip in some circumstances.
See also limited slip differential, locked differential
