abgrenzen
to delimit
To draw a spatial or physical boundary in order to separate one area from another.
Wir haben unseren Garten mit einem Zaun vom Nachbargrundstück abgegrenzt.
We delimited our garden from the neighboring property with a fence.

to delimit / distance / distinguish
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to delimit
To draw a spatial or physical boundary in order to separate one area from another.
Wir haben unseren Garten mit einem Zaun vom Nachbargrundstück abgegrenzt.
We delimited our garden from the neighboring property with a fence.

'Abgrenzen' (to delimit / distance / distinguish) is a separable verb. In a main clause, the prefix 'ab-' goes at the end of the sentence. In subordinate clauses and in the infinitive with 'zu', the verb stays together.
Der Gärtner grenzt das Blumenbeet mit Steinen ab.
The gardener borders off the flower bed with stones.
The verb is derived from the noun 'die Grenze' (the border/boundary). The prefix 'ab-' reinforces the idea of separation. So it is always about drawing a clear line.
Man muss lernen, die eigenen Bedürfnisse klar abzugrenzen.
You have to learn to clearly define your own needs.
You can recognize the meaning from the object and the grammar. If it is about a physical place (garden, area), it refers to spatial separation. If the verb is reflexive ('sich abgrenzen'), it is about social distancing. With abstract objects (terms, topics), it means distinguishing content or meaning.
Wir grenzen den Spielbereich für die Kinder ab.
We mark off the play area for the children.
In the meaning 'sich distanzieren' (to distance oneself), the verb is always reflexive and is used with the fixed preposition 'von' + dative. So the structure is: sich von jemandem/etwas abgrenzen (to distance oneself from someone/something).
Das Unternehmen grenzt sich klar von illegalen Praktiken ab.
The company clearly distances itself from illegal practices.
to distinguish
'unterscheiden' and 'abgrenzen' both have to do with clear differences. You use 'unterscheiden' when you recognize differences or say that things are different. 'abgrenzen' goes one step further: you draw a clear boundary between terms, topics, or areas so that they are not mixed together. The words can be confused because both help with comparison. 'unterscheiden' is more general; 'abgrenzen' fits especially when you want to explain exactly where one thing ends and the other begins.

Im Referat grenzt Lisa das Thema Umwelt klar vom Thema Verkehr ab.
In her presentation, Lisa clearly separates the topic of the environment from the topic of traffic.
Er hat die beiden Geräusche sofort unterschieden, obwohl es laut war.
He immediately distinguished the two sounds, even though it was loud.