There are a few key differences between 1.25 and 2 inch hitches. The most notable difference is in the size and weight capacity. A 1.25 inch hitch can typically accommodate up to 2000 lbs, whereas a 2 inch hitch can accommodate up to 3500 lbs. This means that if you're looking to tow a heavier trailer or load, you'll need to opt for a 2 inch hitch.
Another difference between the two is in the connection point. A 1.25 inch hitch typically has a ball mount that inserts into the receiver tube, whereas a 2 inch hitch has a square shank that slides into the receiver tube. This can affect which type of accessories you can use with your hitch, so be sure to check compatibility before making your purchase.
Finally, because of their different sizes, 1.25 and 2 inch hitches require different sized vehicles receivers. Make sure your vehicle can accommodate the size of hitch you're planning on using before making your purchase!