Violão vs. guitarra
The difference between violão and guitarra depends entirely on geography. In Brazil, there is a strict distinction based on whether the instrument is acoustic or electric. In Portugal, the word guitarra is the standard term for the instrument in general, and violão is recognized as a Brazilian term.
Violão
A1In Brazil, violão refers specifically to the acoustic guitar (usually the classical nylon-string guitar or the steel-string folk guitar). It has a hollow body and amplifies sound naturally. In Portugal, this exact instrument is usually called guitarra clássica or sometimes viola, and the word violão is rarely used by locals.
João pegou o seu violão para tocar samba.
(João took his acoustic guitar to play samba.)
A sonoridade suave do violão é perfeita para a Bossa Nova.
(The smooth sound of the acoustic guitar is perfect for Bossa Nova.)
Quando a luz acabou, nós cantamos ao som do violão.
(When the power went out, we sang to the sound of the acoustic guitar.)
Ele estuda violão clássico no conservatório.
(He studies classical acoustic guitar at the conservatory.)
Guitarra
A1In Brazil, guitarra is short for guitarra elétrica; it refers strictly to the electric guitar which requires an amplifier. However, in Portugal, guitarra is the generic word for the instrument (acoustic or electric). Furthermore, in Portugal, it may refer specifically to the guitarra portuguesa, a pear-shaped instrument used in Fado music.
O músico comprou uma guitarra e um amplificador novo.
(The musician bought a new electric guitar and a new amplifier.)
Ela fez um solo incrível na guitarra durante o show de rock.
(She played an amazing solo on the electric guitar during the rock concert.)
Em Portugal, é comum ouvir o som da guitarra portuguesa nas casas de Fado.
(In Portugal, it is common to hear the sound of the Portuguese guitar in Fado houses.)
Minha banda precisa de alguém que toque guitarra.
(My band needs someone who plays the electric guitar.)
Summary
To summarize: if you are in Brazil, use violão for acoustic and guitarra for electric. If you are in Portugal, use guitarra for almost everything (or guitarra clássica to be specific about the acoustic version), as violão is seen as a Brazilian expression.