Technically speaking, there are some quite different things being used interchangeably here -
Streaming = picking out the layers by ability, and teaching them as a separate class for all their subjects. It is pretty rare, and doesn't allow for much mobility between classes, or for any variation in ability - so you might be brilliant at maths but struggle with English, and end up in the top stream where you find the class goes too fast in English. Similarly you might be in a low stream because you struggle with one subject, but then your other subjects aren't challenging you.
Setting = picking out the layers by ability in that subject, and teaching them separately for that, eg for maths, but having mixed ability classes for other subjects. My secondary school worked on ability sets for maths and foreign languages pretty much from the start, but kept mixed classes for other subjects until a couple of years in.
Differentiation = making sure children get work which suits their current abilities, but not separating them out into classes on the basis of it. They mght be working in ability groups for some subjects, or have slightly different homework, or be on a different level of the reading scheme. That's what is 'normal' in primary schools.
Some schools are better than others at making that non-judgemental, but children pick up pretty fast anyway on whether they are on the tricky books and sums, or not.