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World Partition is an automatic data management and distance-based level streaming system that provides a solution for large world management.
It stores your world in a single persistent level separated into grid cells and provides you with an automatic streaming system to load and unload those cells based on distance from a streaming source.
World Partition is not meant to replace the old workflow (Level Streaming), but it gives another option for larger open worlds (can be used effectively for smaller ones too). You can still use the old way if you want in UE5 (there are no signs of Epic deprecating it).
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Data Layers are a system within World Partition used for organizing your Actors into separate layers. These layers can be loaded and unloaded to organize your world.
The docs are fairly decent in giving a good overview