The above example is from Introduction to Combinatorial Analysis by John Riordan.
Here $\Delta$ is the difference operator.
But I am unable to understand why $\Delta 0^r = 1^r, \Delta^2 0^r = 2^r-2$ and $\Delta^3 0^r = 3^r - 3 \times 2^r +3$.
What I was trying is $\Delta 0^r = (0+1)^r - 0^r = 1^r$, but then $\Delta^2 0^r = \Delta 1^r = (1+1)^r - 1^r = 2^r - 1$, which is not matching with the book.

Riordan's notation is obscuring a lot, which makes things confusing. To make things clear, you need to understand that $\Delta$ operator takes in a sequence of numbers, and returns a new sequence of numbers. The notation $\Delta^2 0^r$, therefore, means the following, in plain English:
Start with the sequence whose $i^\text{th}$ element is $i^r$. Let us call this sequence $s$.
Apply $\Delta$ to this sequence, to get the sequence $\Delta(s)$, whose $i^\text{th}$ element is $(i+1)^r-i^r$.
Apply $\Delta$ to the resulting sequence, to get $\Delta^2(s)$. The $i^\text{th}$ element of $\Delta^2(s)$ is $$ \underbrace{\Big(((i+1)+1)^r-(i+1)^r\Big)}_{(i+1)^\text{st}\text{ element of $\Delta(s)$}} -\underbrace{\Big((i+1)^r-i^r\Big)}_{i^\text{th}\text{ element of $\Delta(s)$}} =(i+2)^r-2(i+1)^r+i^r$$
Finally, $\Delta^2 0^r$ really means "the zeroth element of the sequence $\Delta^2(s)$". Evaluating the above expression at $i=0$, the result is $2^r-2\cdot 1^r+0^r=2^r-2$.
The same logic allows you to find $\Delta^30^r=3^r-3\cdot 2^r+2\cdot 1^r-0^r$.