The act or process of distinguishing; the state of being distinguished or recognized as different.
From distinguish plus -ment suffix (from Latin -mentum), which creates nouns from verbs. This pattern is common in formal English: achievement, management, statement.
The -ment suffix is dying in modern English, making words like 'distinguishment' feel archaic and philosophical—medieval scholars preferred -ment nouns, while we now favor -ing forms or just verbs.
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