I have seen both "vielfältig" and "abwechslungsreich" in various contexts to express the idea of "diverse" or "varied". They seem pretty interchangeable to me. But are they really? Or is there a fine difference in meaning? Also, do they differ in their usage ?
They are not completely interchangeable.
Literally, vielfältig translates to something like manifold. It can mean multifaceted, but is the more objective and more general of the two terms.
Abwechlungsreich literally translates to rich in alternation, and is arguably the more subjective and less general term. It implies a qualitative difference between the alternatives, perhaps even judging on an emotional basis:
If all alternatives are equally monotonous, they might be vielfältig but not necessarily abwechslungsreich.
These two words do have a subtle difference in meaning. Abwechslungsreich derives from "Wechsel" - "change", i.e. the diversity it expresses is a diversity over time, by changing something. If a staff canteen offers only one dish per day, but has one day fish, the other day meat, the next day something vegetarian and so on, without repeating dishes often, you could still say their offering is abwechslungsreich. On the other hand, vielfältig rather expresses diversity being present at the same time: the topics covered here on German Langue SE are vielfältig. And if someone would indicate that a canteen has a vielfältiges Speisenangebot, I would expect that I could choose among different dishes every day.
Of course there are still overlaps, and if you don't want to focus on time, or want to summarize over a certain period of time, you can often replace abwechslungsreich by vielfältig. The other way around usually doesn't work that well.