What is the difference between a microstate and a micronation?

The difference lies in the entity's legitimacy and recognition as a sovereign state by other states of the world. A micro- or ministate is a sovereign nation, while a micronation is not.

"A microstate or ministate is a sovereign state having a very small population or very small land area, but usually both. Some examples include Singapore, Liechtenstein, Monaco, and Vatican City. The influence of microstates in the United Nations General Assembly is disproportionately large due to the one state, one vote rule."
https://en.wikipedia.org/wiki/Microstate

"Micronations — sometimes also referred to as model countries and new country projects — are entities that resemble independent nations or states but which are unrecognized by world governments or major international organisations. These nations usually exist only on paper, on the Internet, or in the minds of their creators. Micronations differ from secession and self-determination movements in that they are largely viewed as being eccentric and ephemeral in nature, and are often created and maintained by a single person or family group."
https://en.wikipedia.org/wiki/Micronation