What is the difference between MTS and M2TS

MTS and M2TS are video container formats that are used in AVCHD format camcorders. These formats were invented by a Sony and Panasonic collaboration in 2006 for the purpose of creating a video format for video recording using their camcorders. As mentioned in Wikipedia, MTS is the format in which camcorders record the video but when the video is exported to a computer, the format is M2TS. These videos have one video encoding algorithm and two audio encoding algorithms. If you are still confused, just know that these too are a form of MPEG files like MP4 but with unique characteristics.
These both formats are used in camcorders to storage all the information that is captured by the device. These are even used for making Blu-ray discs which as we all know contain very high-quality videos.

These formats are good for video recording because they contained detailed information, but are usually converted to some other format after any video editing to reduce the size. Compared to MP4, the size of MTS/M2TS is 3-4 times more and therefore good for only a particular use case of video recording.