As nouns the difference between margarita and cheddar

is that margarita is a cocktail made with tequila, an orange-flavoured liqueur, and lemon or lime juice, often served with salt encrusted on the rim of the glass while cheddar is a cheese styled after the Cheddar cheese made in Cheddar.

As proper nouns the difference between margarita and cheddar

is that margarita is {{given name|female|from=Ancient Greek}} while Cheddar is a village in Somerset, England famous for its cheese, and also for its gorge, caves and remains of early man found in them.

As a verb cheddar is

to cut and press cheese so as to remove the whey and leave drier curds.