On July 8, 2011, Selenium official blog made an announcement for the release of Selenium 2. Selenium 2 was built by integrating Selenium RC & WebDriver. WebDriver back then was a competitive & probably a more preferred web-application testing framework than Selenium RC. Wondering how? Well, WebDriver allowed testers to interact more closely with various browsers by controlling them directly through in-built browser extensions whereas Selenium RC ran a JavaScript Application inside a browser. Fortunately for testers, the developers from both the projects shook hands as they felt integrating Selenium RC & WebDriver could make the life of testers a lot easier. And so it was named as the Selenium WebDriver.
Since then Selenium 2 has been upgraded to a better and improvised version Selenium 3 & recently it got another upgrade Selenium 4.
The main difference between Selenium 2 and Selenium 3 is that now all the major browser vendors will provide their own WebDriver implementations (Apple, Google, Microsoft, and Mozilla) in Selenium 3.0 instead of being developed by Selenium project (Selenium 2.0) and because they know their browsers better than anyone else, their WebDriver implementations can be tightly coupled to the browser, leading to a better testing experience for you.

To know more, refer to the original source: What Is Selenium?