My understanding is that the term most often refers to people (often children) with learning disabilities e.g., with autism, hearing impairment, sight disabled or ADHD - and there several more. Because those folks cannot learn in the same way as the rest of us do - they have special needs.
Additionally, the term is the "politically correct" or "government speak" version of disabled or handicapped.
Here is one dictionary version "the special educational requirements of those with learning difficulties, emotional or behavioral problems, or physical disabilities."
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The invention of the lathe was a turning point in history.
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