What is the difference between rac and waiting list?

This is a good question. They are very different.

With a waiting list, or WL, you do not have a ticket to travel yet. You are in a queue. You can only travel if enough people cancel their tickets. If your ticket is still WL when the train chart is made, it is cancelled. You get your money back, but you cannot board the train. It is only a chance.

RAC means Reservation Against Cancellation. This is much better. You are guaranteed a place on the train. You will share a side-lower berth with another RAC passenger. So, you have a seat for sure. Often, the ticket checker will give you a full berth later if someone does not show up.