A 'daemon' is a software process that runs in the background (continuously) and provides the service to client upon request.
For example
* named is a daemon. When requested it will provide DNS service. Other examples are:
* xinetd (it is a super-daemon, it is responsible for invoking other Internet servers when they are needed)
* inetd (same as xinetd, but with limited configuration options)
* sendmail/postfix (to send/route email)
* Apache/httpd (web server)
A 'server process' run runs one time, when called by a daemon. Once done it will stop. For example telnetd (in.telnetd) or ftpd called from xinetd/inetd daemon . By calling server process from daemon you can save the load and memory. Use a server process for small services such as ftpd, telnetd
