Canola was developed in the early 1970s using traditional plant breeding techniques by Canadian plant breeders to remove the anti-nutritional components (erucic acid and glucosinolates) from rapeseed to assure its safety for human and animal consumption. The canola plant also produced seeds with a very low level of saturated fat, seven percent or below.
Christened “Canola” from “Can” (for Canada) and “ola” (for oil low acid), canola is not, strictly speaking, rapeseed. There is a internationally regulated definition of canola that differentiates it from rapeseed, based upon its having less than two percent erucic acid and less than 30 umoles glucosinolates. Oilseed products that do not meet this standard cannot use the trademarked term "Canola."
Both canola and rapeseed belong to the cabbage or mustard family. The plants' flowers both have that characteristic bright yellow color, and you get oil from both of the seeds by crushing the plants.
That said, they have a couple key genetic differences. Canola was created through plant-breeding in order to get rid of two undesirable components of rapeseed.
Rapeseed oil and canola oil also get mixed up because they can be labeled incorrectly outside of Canada and the United States.