Can Google tell the difference between different spellings of a word?
Most of the time, yes. I am referring to instances where it is a town such as Marlboro/Marlborough or US/UK spellings like Color/Colour. In the instance of towns, if I type “Marlboro” it will show results for the suggested “Marlboro.” If I force Google to show me “Marlboro,” the results are different. As for US/UK spellings, Google shows different search results for each.
For optimization, when referring to towns, use Google’s recommendation. As for US/US spellings, use what is best. If you are a business that want’s to be found in areas with UK spellings such as Canada, Australia, or England, it may be smart to try to use both interchangeably but put emphasis on the UK spelling. If you are a US company, strictly use the US spelling.