The primary difference between an observation and an inference is that the former is experienced first-hand while the latter is based on second-hand information. An observation is the gathering of facts through paying close attention to something in order to get information, whereas an inference is the act or process of reaching a conclusion based on facts already known.
An inference draws conclusions based on evidence gathered through observation. The conclusion is reached logically on the basis of facts known to be true or assumed to be true. An inference can be seen as an interpretation of what is observed.
An inference is an element of reasoning, an act of thinking. Inferences can be accurate or inaccurate, logical or illogical, and justified or unjustified.
Observations are made using the senses of seeing, hearing, smelling, tasting and touching. Inferences are made when one makes assumptions or guesses about what is observed. For example, if someone leaves a building and observes that the ground is wet, that person might infer that it had rained. That person might also infer that the janitor had just washed the sidewalk.
Inferences are often confused with assumptions. However, assumptions cannot be logically deduced, while inferences are logically deduced from the given information.