what is the difference between chicken chilly and fried chicken?

Really. First of chicken "chilly" is cold chicken. chicken chili is with beans onions, peppers and is "soupy".

Fried chicken is FRIED chicken.

Chicken chili is generally ground or chopped and is cooked using a a 'moist' method. Fried chicken is whole pieces of chicken and is cooked using a 'dry' method.

Chicken chilly, is chilly with ground chicken instead of beef, I do it with breasts and thighs, but I dice it.

If your talking southern fried chicken, that is a different process again, I marinate the chicken pieces in buttercream with a few dashes of Tabasco, got 6 hours. The coated in seasoned flour with herbs and spices, then fry it.

is this a joke

the addition of chilli peppers or chilli flakes to give a degree of hotness or spiciness to the dish.

Chicken chili can be made with ground chicken or cup up chicken boneless not. Generally chili powder, cumin and other spices are added to the dish along with bell peppers and onions. Fried chicken is usually made from cut pieces of bone in skin on chicken that has been dipped in a batter or flour, egg and cornmeal and fried in hot oil.