What is the difference between neutral and ground?
This Wikipedia page covers it well - but in short:

Neutral is the return current conductor for AC power circuits. Ground (earth) is a safety connection provided as a separate return conductor for fault currents - i.e. it does not carry current during the normal operation of any connected equipment.

Neutral and earth are connected together at the point of power generation and at the output of each transformer in a transmission system. However, since current can flow in the neutral line during normal operation, voltage can develop between it and earth at the point of consumption. As a result, in your home (for example) neutral and earth will be similar in voltage, but not quite the same.

There are a few different connection methods for ensuring the earth voltage stays close to the actual potential of the surrounding ground, with three most common in the United Kingdom.

T-T (usually older systems, also used for temporary power provision) - a stake in the ground at the transformer connects neutral and earth, and a similar stake at the consumer premises provides a local earth connection - unconnected to the transformer.

TN-S (older systems - but more recent than T-T) - transformer connected as T-T, but a separate earth cable runs from the neutral-earth bond at the transformer supply all the way to the consumer premises, providing a dedicated separate path for fault currents. 

TN-CS (newer installs - last 20 years) - the neutral conductor from the transformer acts as the return path for earth currents as well. Earth within the premises is provided as a connection to neutral at the point of entry to the premises - this connection is made at one point only. Further distributed earth connections are generally made between the ground and the neutral conductor along the length of the cable in order to minimise the voltage between the ground itself and neutral.

This video covers all three systems in detail, including pros and cons of each approach.