Color separation is a professional name which means it will separate the original color to 4 colors (Cyan, Magenta, yellow and black); The color separation job is to scan the original color and then separate it to CMYK model which can be done using printing & graphics design software.
In general, the color model by scanner, digital camera and most of the pictures which download from internet is RGB model. It must be separate to CMYK before printing process and this is the basic requirement for printing. If the color model is RGB or Lab then the screen spot may only could be shown on K plate. In this situation, the color model will be gray color model.
Color separation job is very simple in Photoshop. You only need to convert RGB or Lab model to CMYK model though Image/Mode/CMYK. This way the graphic will have 4 color channels and different color channel will be made on different film while making the film e.g. Cyan film, Magenta film, Yellow film, Black film.