A potentiometer is a three-terminal variable register. A potentiometer can be utilized as a rheostat, but a rheostat is used to vary current. A potentiometer is an instrument used for measuring an electromotive force. This measurement is done by balancing it against the potential difference and bypassing a known current through a known variable resistance.
A rheostat, on the other hand, is an electrical instrument used to control the current by changing the resistance. A potentiometer is a resistor with three terminal and sliding contact with an adjustable voltage divider.
Rheostats are made of many polarized materials, such as metal, ribbons, fluids, and carbon disks. They are not separated so that they can operate in reverse. Potentiometer, on the other hand, is made with a resistive component, typically graphite, which is formed into an arc.