Hello, I saw some people confused about Difficultly.
Here are some very basic information.


All games begin on Normal difficulty. You can start games on the next difficulty level once you have defeated the game on its previous difficulty. You can start games on Nightmare difficulty once you have defeated the game on Normal Difficulty. You can start games on Hell difficulty once you have defeated the game on Nightmare difficulty. You can start games on Inferno difficulty once you have defeated the game on Hell difficulty. This is the case for each of your characters.


Progression
Normal difficultly
Act 1 ____ > Act 2 ____ > Act 3 ____ > Act 4 The End
Nightmare difficultly
Act 1 ____ > Act 2 ____ > Act 3 ____ > Act 4 The End
Hell difficulty
Act 1 ____ > Act 2 ____ > Act 3 ____ > Act 4 The End
Inferno difficulty
Act 1 ____ > Act 2 ____ > Act 3 ____ > Act 4 The End


You create new character, You start on Normal.
Act 1 ____ > Act 2 ____ > Act 3 ____ > Act 4 ___ > The End <
If You want play again, for example Normal, only “Act 3” You can / whatever quest You did (unlock) You can repeat. You also can chose new difficultly → “Nightmare” Where You start from the very beginning in Act 1, with same character equipments and skills, basicly with everything You got as far.

In next difficulty You will encounter more and harder monsters, drop will be also greater, it's directly proportional to difficultly You chose.