What is the difference between transliteration and transcription?
Transliteration converts letters between scripts; transcription represents sounds. One preserves spelling, the other preserves pronunciation, and they produce different results from the same source.
Transliteration. Maps characters from one writing system to another, systematically and ideally reversibly. The goal is that someone who knows the system can reconstruct the original spelling exactly.
It does not tell you how to pronounce the word, and a transliterated form may be unpronounceable for a naive reader — which is acceptable, because that is not its purpose.
Used for library cataloguing, academic citation, passports and official documents, and anywhere the original spelling must be recoverable.
Transcription. Represents how something sounds, in the target language's spelling conventions or in a phonetic alphabet. Not reversible — information about the original spelling is lost, and different source spellings may transcribe identically.
Used for pronunciation guides, journalism, and everyday rendering of names.
Why the same name appears in several forms. Chinese romanisation is the clearest case: Pinyin is the modern standard and is essentially a transcription system designed for pronunciation, which is why Beijing replaced Peking and Mao Zedong replaced Mao Tse-tung — the older Wade–Giles system used different conventions.
Arabic and Russian names likewise appear in multiple English forms depending on which system, or no system, was applied — which is why the same person's name can be spelled several ways in different newspapers.
The practical difficulties:
Diacritics. Rigorous transliteration uses marks that are frequently dropped in general use, losing distinctions and creating ambiguity.
Target-language dependence. A transcription designed for English readers misleads French or German ones, since the same letters represent different sounds.
Established forms persist. Conventional English spellings of well-known names survive long after systems change, and insisting on the systematic form can be more confusing than helpful.
Romanisation is the general term for converting any script into Latin letters, by either method.
Machine transliteration is imperfect, particularly where the source script omits vowels.