**Step-by-Step Solution:**
1. **Definition of Cell Differentiation:**
Cell differentiation is the process by which a less specialized cell becomes a more specialized cell type. This change allows the cell to perform specific functions that are essential for the organism's development and functioning.
2. **Importance in Development:**
Cell differentiation is crucial during the development of multicellular organisms. It enables the formation of various cell types that contribute to the overall structure and function of the organism.
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