Okay kiddo, so you know how boys and girls are different right? That's because of something called sexual differentiation. It's how our bodies develop differently depending on whether we are a boy or a girl.
When a baby is growing inside their mommy's tummy, they are called a "fetus". At first, all fetuses look pretty much the same. They don't have any characteristics which make them a boy or a girl.
About six weeks into development some fetuses start to develop into boys and some into girls. This is where sexual differentiation starts to happen. The fetus has something called a "gonad" which is where either sperm or egg will be made when the baby grows up. The gonad becomes either a testis (if the baby will be a boy) or an ovary (if the baby is going to be a girl).
If the baby is going to be a boy, the gonad will release a hormone called testosterone. This hormone is what causes the fetus to develop male characteristics, like a penis and scrotum. If the baby is going to be a girl, no testosterone is produced and the baby develops female characteristics such as a uterus, fallopian tubes, and a vagina.
As the baby grows in their mommy's tummy, they continue to develop more male or female characteristics. For example, boys will start to produce a hormone called dihydrotestosterone (DHT) which makes their penis and testicles grow. Girls will develop breasts and their ovaries will start to produce estrogen, which is another hormone that helps them grow up to become a woman.
So that's what sexual differentiation is all about. It's how babies develop into boys or girls, and how our bodies become different depending on which sex we are.