Using an organism's characteristics to set it apart is known as:

The process of using an organism's characteristics to set it apart is best described as classification. Classification involves organizing biological diversity into structured categories based on shared characteristics and traits. This method helps in identifying the relationships among different organisms, enabling scientists to group similar species together and differentiate them from others.

While options like identification and differentiation are related, they focus more on recognizing or distinguishing specific organisms rather than the broader concept of sorting organisms into categories. Taxonomy, on the other hand, encompasses classification but is a more overarching field that also includes nomenclature and the principles guiding the grouping of organisms. Thus, classification is the most precise term for the act of setting organisms apart based on their characteristics.