Inflection is the change in one word by which its part of speech (class) remains the same, e.g. [boy] is noun and if we make a little change in it like, [boys] it is also noun. The part of speech or class remains the same. See examples of inflection in other parts of speech.
Inflection in Noun
Inflection in Verb
Inflection in Adjective
Inflection in Adverb
Inflection in Pronoun
In all the above examples you have seen that we have made changes in different parts of speech but in doing so their class remains the same.
Derivation is different from inflection because it is the change in one word by which its part of speech (class) also changes.
hospital, hospitalize, hospitalization
You have seen that the word [hospital] is noun and when it is changed into [hospitalize] it became verb and in [hospitalization] it is again noun. So such change in the word by which its class or part of speech also changes is called derivation.
Open and closed classes
Class is the other name for part of speech.
Open classes or open parts of speech are those in which inflection and derivation is possible. All the above examples of inflection and derivation are the examples of open classes. They are; noun, pronoun, verb, adjective, adverb and preposition.
Closed classes are those parts of speech in which inflection or derivation is not possible. For example in preposition, conjunction (subordinator, coordinator) and articles we cannot make any changes.
Some more examples of open classes
Inflection: mountain, mountains
Derivation: simple (adjective), simplification (noun)
Example of closed classes
We cannot make
any change in articles (the, an, a), prepositions (to, on,
of, at, in etc), and in conjunctions (but, and, also etc).