I am a little confused about the difference between $(X,Y,Z)$ and $(x,y,z)$
I saw a statement that says $(X,Y,Z)$ = $(x,y,1)$ with $x=\frac{X}{Z},y=\frac{Y}{Z}$ in the projective plane.
I feel like I am missing what the difference is (in this particular case) with capitalisation of $x$, $y$ and $z$.
There’s no standard. Different authors use different conventions, and you just have to figure out what capitalization and other text style variations convey on a case-by-case basis.