Hi Ranjana
An app registration is the global definition of a registered Microsoft Entra app that can be used by multiple tenants. On the other hand, a service principal is the local representation of the app registration for use in a specific tenant. A service principal links to its app registration and can be referenced by more than one service principal in organizations with multiple Microsoft Entra tenants.
Service principal authentication is useful in situations such as automated auditing processes, no need to sign in to the Power BI service, shared access to data, use by multiple administrators, and technical blockers.
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Thanks
Deepanshu