Short answers, pulled from the story.
A canal is a waterway or engineered channel built for drainage management such as flood control and irrigation, or for carrying water transport vehicles. It carries free, calm surface flow under atmospheric pressure and can be thought of as an artificial river. Canals are still used to supply water for agriculture and, in the 21st century, as easements for fibre optic cabling.
A navigation runs roughly parallel to the valley and stream bed of an unimproved river and always shares that river's drainage basin. A true canal cuts across a drainage divide, creating a navigable channel that connects two different drainage basins. True canals are harder to build and often need viaducts and aqueducts.
The Grand Canal of China is the longest and oldest extant canal in the world, stretching 1,794 km from Beijing to Hangzhou. It was built to carry the Emperor Yang Guang, with the main project beginning in 605 and completed in 609, though its oldest section dates to at least 486 BC. It is rarely less than 30 m wide even in its narrowest urban stretches.
The oldest known canals were irrigation canals built in Mesopotamia around 4000 BC, in what is now Iraq. The Indus Valley civilization around 3000 BC developed sophisticated irrigation and storage systems, and in Egypt, Pepi I Meryre, who reigned from 2332 to 2283 BC, ordered a canal to bypass the cataract on the Nile near Aswan.
Canals allowed a single horse to draw a barge carrying up to thirty tons, more than ten times the cargo per horse possible with a cart. The Bridgewater Canal, opened in 1761 for the 3rd Duke of Bridgewater, cut the price of coal in Manchester by nearly two thirds within a year. The period from the 1770s to the 1830s became the Golden Age of British canals.
Canal shipping was first augmented and later superseded by railways, which were faster, less geographically constrained, and generally cheaper to maintain. The replacement began in the United Kingdom in the 1840s, and by the early 1880s many canals could not compete with rail and were abandoned. In the United States, the canal boom lasted until about 1850 when railroads grew seriously competitive.
The Erie Canal, opened in 1825, runs about 363 mi from Albany on the Hudson River to Buffalo at Lake Erie, with 36 locks and a total elevation difference of around 565 ft. It completed a navigable route from the Atlantic Ocean to the Great Lakes and repaid its seven million US dollar capital while turning a profit. By halving transportation costs it greatly accelerated settlement of the American mid west.