Magento2 – Difference Between referenceContainer and referenceBlock

<remove name="" /> operates in the global block scope of Mage_Core_Model_Layout. These are collected in Mage_Core_Model_Layout::generateXml() and used to prevent the block with the specified name from even being instantiated. Also, any child blocks declared for a <remove />ed block will also not be instantiated.

<action method="" /> a.k.a Mage_Core_Block_Abstract::unsetChild() is a block-level method which de-lists the indicated child block (by alias, not by name) from the parent block instance on which the action is being called. This most often results in the block "disappearing" from the rendered output, even though the block instance is still created. Used in combination with the ::append() or ::insert() methods, it is used to perform a "move".

A preference is equivalent to class rewriting from Magento 1. It's equivalent to saying, "Whenever code asks for ClassA, give them MyClassB instead." MyClassB is expected to be a complete implementation of ClassA, plus whatever behavior you add or modify on top.

As in Magento 1, only one preference (rewrite) can be active for a class at one time unless you chain them manually (such that MyClassB extends OtherClassB, and OtherClassB extends ClassA).

A plugin allows you to execute code before, around, or after methods from the class you're hooking onto. Your plugin class does not replace the target class, and it is not an instance of it. You just have methods before{method}, around{method}, after{method} which get executed at the appropriate time in respect to {method} on the target class.

Since plugins do not replace the target class, any number of plugins can be active on a class simultaneously. Magento just executes them one after another based on the sortOrder parameter in your XML.

Because of that, plugins are much more flexible than preferences. You should use plugins whenever possible, and avoid preferences for rewriting classes unless absolutely necessary.

You can read more about how plugins work and how to use them in the official documentation.