If both derogation and inferiorization can be used to describe an insult, what is the difference between them?
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By "used as insult", you apparently mean "used as means of insult". If we suppose that inferiorization is a word, and that it means "process of making something inferior", the first of the two most-common senses of derogation actually is quite close to that same meaning. The two common senses of derogation are
The text about racism (mentioned in a comment) may be using derogation to refer to speech or actions that belittle (underrate) persons, and inferiorization to speech or actions that cause people to become or seem inferior.
Commonly, disparage would be used instead of derogate for the sense in question, and disparagement instead of derogation, and inferiorization completely avoided.
"Derogation" is a real word - meaning the partial revocation or limiting implementation of a law.
"Inferiorization" is what you get when you start adding extra endings to a perfectly good word to make your subject sound more serious and academic.