Palazzo pants and Shararas are both flowing silhouettes for the legs, but with distinct styles:

Palazzo Sets: Imagine wide-leg pants that drape from the waist down, offering a breezy and comfortable feel. Often paired with a tunic or kurti, they create a relaxed, elegant look.
Sharara Sets: Picture pants that hug the hips and thighs before dramatically flaring out from the knee down. This creates a more dramatic and voluminous look, perfect for special occasions. Shararas are usually paired with a shorter kurti for a balanced silhouette.