Step activation will look to the day that the step is activated, + the number of days you select. Workflow start will look to the starting date of the workflow, + the number of days you select.
'Step Activation' is most useful for workflows with less strict time constraints. If a particular step is activated later than intended, the tasks within it will be due x number of days from that step's activation.
'Workflow Start' is most useful for recurring workflows with stricter timetables. If a particular step is activated later than intended, the tasks within it will still be due x number of days from workflow start.