1.18 is a continuation of the Caves & Cliffs update in which both the underground and aboveground have been completely overhauled with all-new , more realistic terrain generation. This is the first time since 1.7 in 2013 that the terrain has been overhauled.
The world height limit has been increased 64 blocks, up to altitude 319, and the bottom of the world has been moved down 64 blocks as well, from altitude 0 to altitude −64. This is an increase of 50% and makes the world feel so much bigger.
Caves have been revamped, becoming unrecognisable to caves from older versions of the game. They can now generate as massive openings and expansive labyrinths, though there are also some new very tight, claustrophobic caves – a large variety.
The previous update, 1.17, did not change terrain but added the relevant new blocks, items, and mobs, so 1.18 does not contain any of these, but rather focuses solely on terrain generation.
Five new biomes have been added in 1.18, all mountain-related. These are the grove, meadow, jagged peaks, stony peaks, and frozen peaks.
Due to the terrain overhaul, several hilly biome variants, such as the birch forest hills or modified jungle, have been removed since hills may now generate in any such biome.
Also biome-related, the dripstone and lush cave biomes, introduced but not implemented in 1.17, may now generate naturally underground.
A new terrain feature in 1.18 is the large ore vein, noodley lengths of iron or copper ore that may generate hundreds of blocks long. Some ores like diamond are also now less likely to generate exposed to air.
Some features that were originally going to be in this update, such as the deep dark and archeology, have been pushed back to future updates to become more complete.
For a visual guide to this update, see my video below: