I said I'd make this post, and I have.
Basically, potential is something that's thrown around a lot, but the way it works is often debated and questioned. Some wonder if potential even matters anymore since apparently it doesn't really seem to stick anymore, but I've learned about it from what I've seen.
Potential is a word used for anything that you can do, but don't. You potentially could, but aren't. In Dragon Ball, this generally deals with fighting potential, ki, ability. But not all potentials are created equal, nor are the ways of awakening them. Thankfully, I think I know how to explain it well. I'll try to be brief.
There are three classes of Potential Awakenings. Each of them are differentiated not by what they do, but how they do it.
POTENTIAL UNLOCK
Potential Unlocks are techniques, items, or other things designed to do what the name implies. But Potential Unlocks aren't entirely permanent, and most cases they only work once and are required to be done again after you've grown. Such things would be Grand Elder Guru's Potential Unlocks, and the Ultra Divine Water. What these do is awaken what you already have waiting into your base form. Basically what all you're capable of now. But as you grow, you gain NEW Potential. As that Potential increases, you will require more Unlocks to put it into your base form. An example would be this.
Example: Gohan has a power level of 1,000. He goes to Guru and Guru Unlocks his potential. Gohan now has, say, 20,000 now. Well, as Gohan trains, he gains a higher power level and possibly limit breaks. Visiting Guru again, Guru says he has more Potential, and what once was 20,000 now is awakened again into 180,000 and so on.
Every time Gohan grows, he'll need to reawaken his potential through this method. It's a useful tool, but isn't always the best.
POTENTIAL UNLEASHED
Potential Unleashed is a technique that has been used in many different ways. Old Kai's unlock ritual for Gohan, the Dragon Balls for Piccolo, or Super Saiyan 4 for GT Goku, Majin Mark for Vegeta, and so on. What sets these techniques apart from the above mentioned "Unlocks" is that this doesn't go into your base form, but becomes a transformation. This transformation is better, because it unlocks your potential every time you utilize it, and as your potential increases through battle, so too does your potential power. I'm done cases, limit breaks are even possible where the form can evolve. This would be Orange Piccolo or Beast Gohan modes. Potential Unleashed forms are something you can utilize so long as you're physically strong enough to handle your full potential. If one neglects their training, their Potential Unleashed forms may be locked from them until they get back into shape. Potential Unleashed grows with the user and can see users. One way of understanding this is remembering that Gohan was roughly equal to Super Saiyan 3 Goku in the Buu Saga, perhaps a little stronger. He was weaker than Super Saiyan god Goku in BoG, but after training, Potential Unleashed Gohan was as strong as Super Saiyan Blue. The transformation's multiplier is fluid based upon the user's potential at that moment. It was Old Kai's belief that it would be superior to Super Saiyan Blue for Goku if he had it before the Tournament of Power. Therefore the form's power is whatever the strongest you could be at any one moment in time.
Example: Gohan has a power level of 100,000. After achieving Potential Unleashed, his Power level is 1,825,978. As he trains, he limit breaks. His base form changes to 150,000, but in Potential Unleashed, it becomes 4,785,246. Gohan's Potential Unleashed form is all of his present potential and will fluctuate depending upon how much of it he has, and how much remains unrealized in his base form.
GROWTH POTENTIAL (AND AWAKENINGS)
Growth Potential is a concept that's unique, but different from the definition of previously stated Potential. The key lies in determining what kind of potential the context is pointing toward. An example of this would be like this.
Example:
Gohan is stated to have more potential than Goku.
Gohan has Potential Unleashed.
Potential Unleashed is weaker than Goku.
All of the above statements are true. But how? The key lies in "time". There's the "Present" (Or physical potential) and there's "The Future" (or growth potential). Imagine for a moment that you're watching TV live. Everything on your screen is happening currently and you're watching it in real time. That's how Present/Physical Potential works. You have access to all that you can possibly do in this moment. Your current body is in it's current absolute peak performance in this current moment. But Future/Growth Potential is like watching tomorrow's broadcasts today. This isn't yours physical potential, but instead what you COULD become. Growth Potential is the difference between Teen Gohan and Baby Gohan. Both are Gohan, and both have the same Growth Potential. Baby Gohan can become a Super Saiyan 2... when he grows. Baby Gohan cannot attain Super Saiyan 2. No matter how mad you make him, he can't become a Super Saiyan 2. Teen Gohan CAN become a Super Saiyan 2. While Teen Gohan have completely different physical potential, one barely having 20,000 power level on Namek after Potential Unlocking, with the other being way past 150,000,000. But that being say, both of them, if they train hard, will grow the same amount.
Example: Goku spends 1 year straight training to achieve Super Saiyan Blue level strength. Gohan trains 24 hours to attain it.
Goku's strength is higher than Gohan's, yet Gohan can get the same strength in less time than Goku, meaning he has more Growth Potential. Gohan's Potential Unleashed DOES NOT COUNT IN GROWTH POTENTIAL. Only current Potential, or Gohan couldn't grow stronger ever.
However, Granolah made a wish for all of the potential in his life to be awakened. This technique takes every day you would have trained and condenses it down into a single moment, cutting out one's life span. Granolah could only live for 3 years, because he sacrificed all of his remaining years to have that potential now. This means Granolah has not only his physical potential unlocked, but his growth potential awakened as well, save for 3 years which he would use to accomplish his goals.
BOTTOM LINE
Guru's Potential Unlock only unlocks your Present/Physical Potential for this moment. The technique is momentary, and every time you grow stronger, you'll need to have your potential unlocked again.
Old Kai's Potential Unleashed only unlocks your Present/Physical Potential for this moment, but the technique is continual, and every time you utilize Potential Unleashed, you essentially have all of your potential awakened again continuously while fighting. As your potential grows, so too does the strength of the form.
Granolah's Potential Unlock will unlock ALL of your potential, including not only your Present/Physical Potential, but will also all of your Future/Growth Potential. What you COULD have done in the years you sacrificed becomes Present/Physical Potential which is then unlocked. The technique is continuous and effects include the potential of your present body, as well as your future body.
I hope I could explain it well enough to get my own personal view of how "Potential" works in Dragon Ball understood. Have a great day, y'all!