vs
QUICK ANSWER
"Fallecido" is an adjective which is often translated as "deceased", and "difunto" is an adjective which is also often translated as "deceased". Learn more about the difference between "fallecido" and "difunto" below.
fallecido(
fah
-
yeh
-
see
-
doh
)An adjective is a word that describes a noun (e.g., the big dog).
This means that the noun can be masculine or feminine, depending on the gender of the noun it refers to (e.g., el doctor, la doctora).
a. deceased 
El albacea debe ocuparse de la propiedad y las deudas del fallecido.The executor must deal with the property and debts of the deceased.
difunto(
dee
-
foon
-
toh
)An adjective is a word that describes a noun (e.g., the big dog).
1. (dead)
a. deceased 
El artista hace figuras de músicos difuntos para adornar los altares de muertos.The artist makes figures of deceased musicians to decorate Day of the Dead altars.
La familia del paciente difunto está demandando al hospital donde murió.The family of the deceased patient is suing the hospital where he died.
This means that the noun can be masculine or feminine, depending on the gender of the noun it refers to (e.g., el doctor, la doctora).
a. deceased 
El alcalde dio sus condolencias a la familia del difunto.The mayor offered his condolences to the family of the deceased.
los difuntos
A plural noun indicates that there is more than one person, place, thing, or idea.
3. (general)
a. deceased 
Nos hemos reunido para honrar a los difuntos, pero también para encontrar consuelo en el Señor a pesar del dolor.We have got together to honor the deceased, but also to find comfort in our Lord in spite of our grief.
b. departed 
A continuación, rezaremos una oración por los difuntos.We will now say a prayer for the departed.