Differentiated assignments is a way to create assignments for individual students or sections, as opposed to the entire course (or all sections in a single Canvas course site). Differentiated assignments are not a special type of assignment so much as a way of setting up any assignment you've created. This option allows you to assign different due-dates to different sets of students. When creating an assignment, the Assign to field defaults to "Everyone."

Complete the following steps to set up a differentiated assignment:

When creating a new assignment first click the "X" to remove the "Everyone" tag. This way the instructor will see a scrolling list, to be able to select the first section(s) or student(s) to create the assignment for.
Complete the remaining date fields.
Click +Add.
Select the next section(s) or student(s), and then complete the remaining date fields.
Repeat this process as many times as needed.
Click Save or Save & Publish.

Resources:

How to assign an assignment to individual students in Canvas
How do I view differentiated assignments with different due dates in a course?