A major difference is: string will have static storage duration, whereas as a character array will not, unless it is explicitly specified by using the static keyword. Actually, a string is a character array with following properties :
The multi-byte character sequence, to which we generally call string, is used to initialize an array of static storage duration. The size of this array is just sufficient to contain these characters plus the terminating NUL character.
It not specified what happens if this array, i.e., string, is modified. So the value of a string is the sequence of the values of the contained characters, in order.