When cells express specific genes that characterise a certain type of cell we say that a cell has become differentiated.
Once a cell becomes differentiated it only expresses the genes that produce the proteins characteristic for that type of cell.
Differentiated cells are important in a multicellular organism because they are able to perform a specialised function in the body. However, specialisation comes at a cost.
The cost is that the differentiated cells often lose the ability to make new copies of themselves.
Multicellular organisms must therefore retain some unspecialised cells that can replenish cells when needed. These unspecialised cells are called stem cells.