ITF (International Taekwon-do Federation) is more traditional and focused on self-defense; it allows punches to the face; and punches in its forms are thrown from further above the hip than in WTF. ITF is also often called a North Korean school of Taekwondo.
The original ITF was formed by General Choi Hong Hi in South Korea in 1966. Choi later moved into exile in Canada due to controversy over his work to introduce Taekwondo to North Korea – a country where he eventually spent the final two decades of his life. Due to later schisms, at least three different organizations now claim the name ITF (located in Spain, Austria and South Korea).
WTF (World Taekwondo Federation) on the other hand, is described as being more modern and focused on sparring ; it is the competitive form of Taekwondo as known from the Olympic Games, which does not allow punches to the face; its forms have punches thrown from the hip; and it is said to be the Taekwondo rooted in South Korea.
WTF was formed in 1973 as the international federation governing Taekwondo as a sport. WTF formerly only recognized black belts from the Kukkiwon School, later years have seen a softening up of this policy, for example with USA Taekwondo (the Taekwondo branch of the United States Olympic Committee) recognizing dan ranks from ITF.