In very basic terms, a propeller is a type of fan that transmits power by converting rotational motion into thrust. An impeller is a similar device but is contained within a tube or cylinder to increase the flow/pressure of a fluid or gas. A propeller is an open-running device - its function directly creates an effect. An impeller is more of an "internal" device, using centrifugal force to propel a substance to other integral mechanical parts of the machinery.
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