Canon is a term, which was originally used when talking about the Bible, to discuss which holy texts were official and counted as part of the Bible.
The word now is used to mean the parts of a story that are considered official. Such as if I’m talking about Star Wars, then the Star Wars movies are canon, they are the official parts of the main story. And something like Lego Star Wars animated specials would not be considered canon, they aren’t part of the official story. Characters in other Star Wars films won’t refer to the events of the Lego Star Wars adventure. If it’s non-canon, the events of that story don’t actually count.
Head-canon is a fan term for “I choose to believe this is true about a character, even if I know it’s not officially true. But it is true in my head.” For instance, there are people who like to believe that Luke Skywalker was gay. At no point in the movies do we ever see him demonstrate romantic interest in men, but at the same time at no point the movies are we showing that he doesn’t have romantic interest in men. (Mark Hamill, who played Luke Skywalker, has officially stated that he is totally fine with that interpretation.) So there are some people who have decided that when they think about Star Wars, they will consider Luke to be gay, even if that’s not officially true, because it makes them happy.
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