Difference between string and text in rails?

If you are using postgres use text wherever you can, unless you have a size constraint since there is no performance penalty for text vs varchar

There is no performance difference among these three types, apart from increased storage space when using the blank-padded type, and a few extra CPU cycles to check the length when storing into a length-constrained column. While character(n) has performance advantages in some other database systems, there is no such advantage in PostgreSQL; in fact character(n) is usually the slowest of the three because of its additional storage costs. In most situations text or character varying should be used instead

PostsgreSQL manual

The difference relies in how the symbol is converted into its respective column type in query language.

with MySQL :string is mapped to VARCHAR(255)

• https://edgeguides.rubyonrails.org/active_record_migrations.html

:string |                   VARCHAR                | :limit => 1 to 255 (default = 255)  
:text   | TINYTEXT, TEXT, MEDIUMTEXT, or LONGTEXT2 | :limit => 1 to 4294967296 (default = 65536)

Reference:

https://hub.packtpub.com/working-rails-activerecord-migrations-models-scaffolding-and-database-completion/

When should each be used?

As a general rule of thumb, use :string for short text input (username, email, password, titles, etc.) and use :text for longer expected input such as descriptions, comment content, etc.