EDIT 11/20/17: I have come to realize that a lot of what I wrote in this post is wrong. I have since written a revision in hope of correcting it. I am leaving the rest of this post as is since people still might find it interesting on some level.
If I had to differentiate them, there are a few ways I would go about it. One, I believe that all mindfucks involve humiliation, but not all humiliation is mindfucking.
Humiliation is an internal event. It is something you feel and it is created in your own mind. If you meet someone who is truly happy-go-lucky and carefree, they are difficult to humiliate because they are able to turn their “give-a-fuck” off, which blocks the humiliation process.
Humiliation is mostly rooted in observation and perception. If you humiliate someone, you make an observation or perform an action that causes an internal stirring within the target. In most cases this involves words or actions that are symbolic of something else. Even if the action is physical, e.g. pulling down their pants in public, the act of pulling their pants down doesn’t cause them physical harm, the intent would be for them to experience the reactions from others that cause embarrassment within themselves. As an example to how this affects individuals differently, if you can imagine pulling down the pants of someone with a 12″ horse cock, they might just stand there and act proud of their trouser-snake. Thus, it only works when it makes someone feel uncomfortable because they have insecurity about the part of themselves that is being (figuratively) exposed.
Taking a non-physical example, announcing to a group of people that a guy truly has a 1″ when erect penis (and this is true) would be humiliating because it is unlikely that he will be comfortable admitting to that due to society’s views on masculinity and sexual performance. This would probably be only slightly less damaging than actually getting pantsed in front of those people.
Mindfucking, on the other hand, is an active exchange in which humiliation is used to achieve a desired end. In this case, that desired ends are increased submission and arousal from the sub and increased dominance and arousal from the dominant. Basically, a mindfuck isn’t just humiliation, it is humiliation with a purpose.
One aspect of mindfucking is that it can be pretend. They don’t have to be actually experienced. They can be part of a process that puts the sub into a state of fear and embarrassment about what COULD happen.
In continuing with my example of using my blog readers as examples, yesterday Lars and slars had a pretty good example of a mindfuck that involved the fear of humiliation/embarrassment more than the actual. Lars got slars a llama pajama onesie with a tail and then convinced her that he was going to force her to wear it to church. The fear of this potential event is enough to send a sub spiraling through a massive array of emotions based solely upon the anticipation of humiliation. I thought it was a pretty good mindfuck but she might beg to differ.
Going back to the example about Mr. 1″, if a Domme told him that she was going to tell everyone at a party that he had a 1″ erect penis, that would be a mindfuck. She could build off of it by saying that if people didn’t believe her that she would make him drop his pants and show everyone as proof. She could take it further by saying if he wasn’t erect that she would make him stroke it in front of them until it was. She could take it further by telling him that he had to answer honestly any questions others might have and that she would answer honestly any questions they might have as well, e.g. if someone asks her if that is enough to satisfy her she would tell them no and that they needed to use other means to do so. She could take it farther by telling him that if any of the ladies wanted to touch it, she would give them permission to.
In this scenario, nothing has actually happened but the Domme has managed to mindfuck him 5-6 times.
So… mindfucking can involve actual humiliation or merely play off the fear of humiliation.
Again, this is a skill that tends to flow naturally for a dominant and those it doesn’t appeal to often struggle to see it as part of a dynamic (they often see it as abusive).