A decal probably starts with a sheet of vinyl then is printed on with vinyl inks. The vinyl with its inks is then applied to the surface of whatever (in this case a pump surface). A water release decal starts out with a surface of glue on paper that is dissolved with water. Lacquer paint is then applied to that surface to create the desired image. Once the image is complete, the entire printed surface is covered with a layer of clear lacquer which in effect binds all of the different colors as one unit. Once the decal is placed in water, the printed colors float off of the glue and is then slid onto the surface of a piece of painted metal.
This is a simplified explanation of the decal differences from my standpoint. For what it is worth, original decals were made with the water release process.
I dare not resd what I just wrote for fear that I left major areas unexplained.
Koz