Is there a fundamental difference between a small galaxy, and a large star cluster?
There are a couple of important distinctions between the two types of objects. Galaxies are objects which range in mass from about $10^{9}-10^{12} M_{\odot}$, and contain 'halos' of dark matter which represent the majority of the mass of the object. Now, there are things called dwarf galaxies (which are less massive than regular galaxies; I'd imagine that there really could be a bit of a blurred distinction between these two kinds of objects), however dwarf galaxies still seem to have dark matter components to them.

Globular clusters are tightly bound collections of about $10^{6}$ stars, and do not have significant (if any) dark matter contained within or around them. So for these reasons in practice it is not hard to confuse the two.

Some References:

1) Evidence that dwarf galaxies are dominated by a dark-matter component. 

2) Dark matter present in globular clusters are either unlikely, or incredibly highly concentrated and approximately the same mass as the stellar component.