What is the difference between Damascus and Wootz steel?

First, let’s clear up one thing: Damascus refers mostly to the pattern in the steel, rather than the actual composition of the steel. Therefore, in the modern sense of the word, there are multiple types of Damascus. Originally Damascus referred to the Wootz crucible steel swords, but those ingots were lost for some reason, and after some time, pattern welded steel started being produced to mimic the original Damascus pattern. Now there are multiple ways of getting these patterns. Note: the patterns are etched in the steel itself, they are not inlaid or ground onto the surface, but rather, go through the entire metal.
Wootz : Wootz steel is the original Damascus. Wootz ingots were produced in India, near mines in Hyderabad. These steel ingots were highly prized, and would be purchased immediately by traders and sold to swordsmiths throughout asia and the middle east. The wootz ingot is a crucible steel. The iron ore was put into a clay crucible (like a sealed round clay pot), and then carbon was added. This is possible with charcoal (See Heller making modern Wootz), but the Indians might have used plant fiber for the carbon. Then flux was added on top to seal it and draw out the air, most probably glass. The iron ore itself had traces of hard metals such as vanadium, manganese, phosphorus, etc, as seen from chemical analysis of the ancient blades. The crucible was then heated in a low temperature fire and the resulting steel drew in the carbon, and the hard metals formed bands of micro-segregation within the steel, which caused the ultimate damascus pattern. It is possible that the wootz ingots were heated and slow cooled repeatedly, to infuse sufficient carbon into the steel, and also to form the bands within the micro-structure.
This art was lost after a few centuries, either because: a) there was better/cheaper steels available or b) the ore mines with the correct quantities of hard metals ran out, and thus ‘wootz ingots’ of the correct type for banding were no longer available. Please note, that in this, the real secret was the making of the ingots, not the making of the blades.
Pattern Welded Damascus: In an attempt to replicate the patterned steel, smiths turned to another technique, which is pattern welding. This is essentially stacking steel plates together, of different quality metals (different carbon contents, different levels of other metals), and then tack welding them into one block. After that the block is heated in the forge, and then power hammered together, and elongated. Then a chisel is used to break it in two, and fold it back, thus doubling the layers. As you can imagine, each time this is done, you’re doubling the layers, so quite quickly you can have a very high layer count, which will reinforce the ultimate pattern in the metal. This method both creates patterns in the metal, and also homogenizes the steel, meaning the carbon and trace elements are spread out through the ingot and ultimately the blade. Thus, the final product is better, if your steel was not high quality to begin with. Pattern welded damascus can further be notched to create more severe patterns. (Deep notches cut into the ingot, causing a variation of the ladder pattern)
Canister Damascus: In this technique, a metal canister is filled with layers of different kinds of steel, welded shut, and then heated. The steel inside the canister becomes one ingot, but retains the layers, thereby ultimately keeping a pattern. Then, the canister is ground off, and the metal ingot can be further folded like regular steel, or just forged straight away. All three methods have to be finished with acid etching and polished to really bring out the patterns.
All three of these will create patterns in the steel itself, and the patterns themselves are called damascene, and the meaning of the word has now come to reflect the patterned blade itself, rather than what method was used to produce the original ingot. True Wootz cannot be reliably reproduced so far, and in any case, modern L2 or machine steel is already superior, so there is no real reason to try and replicate it other than simple curiosity. Pattern welding and Canister Damascus is mostly used for decorative purposes in my opinion, or to use different kinds of available steel, rather than any superiority of ingot quality over high grade machine tool homogenized modern steels available.

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