All-wheel drive is similar to full-time 4WD in that the system is always sending power to the wheels, but AWD has no 2WD switch. It is always operating in 4WD mode. When the road gets wet or slippery, the AWD system locks the axles and automatically distributes power to all four of the wheels. In many cases, AWD vehicles have no on/off switch. Some AWD systems are more rugged than others, though most can't be taken into extreme off-road situations.
If the AWD system allows the driver to switch to a "low" range gearing setting, like in the Toyota 4Runner & land cruiser, then it is probably intended for severe off-road use. AWD systems work well in cars and crossover vehicles because they don't add much weight and make them true all-weather vehicles.