POSIX file systems are case sensitive. So a file called Test is different from TEST is different from tesT (Though one is recommended not to torture users in that fashion).
So under a proper POSIX system you can do
mkdir Test mkdir tesT mkdir TEST
and end up with three different directories.
Darwin lulls you into a false sense of security by accepting all three forms but behind the scenes it simply maps it all to the same form. So you get a nonsensical complaint as you do this
mkdir Test # OK mkdir tesT # Directory already exists? WTF? mkdir TEST # Directory already exists? Whaaa?