The difference between Reference and Component?

Hello,
My project is using dll (COM object) which is listed under References.
It works fine.
But, accidently when browsing the Components list I have found the same dll,
listed under the same name but it is not selected (not checked).
I wonder, should that COM be used as a component or reference or both?
How to know? What can be a difference?
Your thoughts please,
Jack


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