The practices of waidan, known as 'external alchemy' or 'external elixir', are an early branch of Chinese alchemy that focuses on compounding elixirs of immortality. This practice is deeply rooted in Taoist traditions and aims to achieve physical immortality and transcendence through the concoction of special elixirs, often involving various minerals and other substances.

The concept of xiaohua, on the other hand, is related to the idea of 'small transformation' or 'lesser transformation'. It is often associated with the transformation of the body and spirit through internal alchemy or neidan, which is a more spiritual and internalized form of alchemy compared to waidan. Xiaohua is about achieving a state of spiritual refinement and transformation, rather than the physical immortality sought through waidan.

The relationship between waidan and xiaohua can be seen as complementary paths within the broader scope of Taoist alchemy. While waidan focuses on external substances and physical transformation, xiaohua is concerned with internal spiritual development and the refinement of one's inner nature. Both practices aim to achieve a form of transcendence, but they approach the goal from different angles and emphasize different aspects of the human experience.

For more detailed information on these concepts, you can refer to resources such as the Wikipedia page on Waidan and scholarly works on Taoist alchemy and the Great Clarity tradition.