These terra cotta mugs are fired at cone 03. Although the glaze on the left one is melted well the terra cotta itself has a porosity of more than 10%. The mug on the right is a finer grained terra cotta with added frit to make it vitrify. It is thus dramatically stronger and more durable, rivalling high temperature stoneware. Neither of the glazes are crazed, but the glaze on the right is much more firmly attached (has a better interface with the glaze) and therefore resistant to future crazing. Does the mug on the left have an advantage? Yes. Although both can withstand hot coffee being poured in, the one on the left can withstand more dramatic thermal shocks without the piece itself cracking.
The term Terra Cotta can refer to a process or a kind of clay. Terra cotta clays are high in iron and available almost everywhere. While they vitrify at low temperatures, they are typically fired much lower than that and covered with colorful glazes.