Induction is reasoning from a limited number of observations toward a general conclusion. A classic example: After observing that 2 or 10 or 1,000 ravens are black, you may decide that all ravens are black.
Another way of thinking about induction is that it is reasoning by pattern recognition – we fill in the gaps of missing information.
With deduction you start with a set of possibilities and reduce it until a smaller subset remains. For example, a murder mystery is an exercise in deduction. Typically, the detective begins with a set of possible suspects — the butler, the maid, the business partner, and the widow. By the end of the story he has reduced this set to only one person: “The victim died in the bathtub but was moved to the bed. Neither woman could have lifted the body, nor could the butler with his war wound. Therefore, the business partner must have committed the crime.”
Humans are relatively good at induction and relatively poor at deduction. Any of us is capable of instantly recognizing a face (an inductive task), yet most of us would have a tough time quickly doing the deductive calculation:
(239.46 x 0.48 + 6.03) / 120.9708
Computers are relatively poor at induction and relatively good at deduction. A simple pocket calculator can quickly and perfectly do the calculation, while it is a very hard programming challenge to get even a powerful computer to accurately recognize a face.
— The Origin of Wealth by Eric D. Beinhocker and Logic for Dummies by Mark Zegarelli