What is the difference between "photo" and "image"?

A "photo" is something that was taken with a camera.

Short for "Photograph". Photo means 'light'.

An "image" is something generated or a representation of something in any other way. This can be a combination of different photos, part of a photo that has been greatly edited, or really, anything that has been made in Adobe Photoshop.

All elephants are gray things, but not all grey things are elephants. All photos are images, but not all images are photos.

Every photo is also an image, but not every image is a photo. An image can also be a drawing, a vector graphic, a bitmap file, many more. The distinction also very much depends on the context. In software, images and photos belong to the same group of objects and behave similarly, for example when placing an image/photo into a document or on a web site.