Derogation, in civil law and common law, is the partial suppression of a law, as opposed to annulment (total abolition of a law by explicit repeal), and obrogation (the partial or total modification or repeal of a law by the imposition of a later and contrary one). It is sometimes used, loosely, to mean abrogation, as in the legal maxim lex posterior derogat priori (a subsequent law derogates the previous one).
In terms of European Union legislation, a derogation can also imply that a member state delays the implementation of an element of an EU Regulation (etc.) into their legal system over a given timescale, such as five years; or that a member state has opted not to enforce a specific provision in a treaty due to internal circumstances (typically a state of emergency).
That is to say, in canon law a dispensation affirms the validity of a law, but asserts that the law will not be held to apply to one or more specific persons, for a specific reason. (For example, while the Catholic Church's canon law does not normally recognise gender transition, an intersex woman may present appropriate medical documentation to seek, and possibly receive, a dispensation from the Holy See to live and be recognised as a man, or vice versa.) Derogation, on the other hand, affects the general applicability of a law.
A non-canon-law analogue of dispensation might be the issuing of a zoning variance to a particular business, while a general rezoning applied to all properties in an area is more analogous to derogation.