The type of stone refers to the material it is made with. You can find many different types, including diamond, ceramic, natural stone, and synthetic. I would only suggest diamond if you’re planning to be sharpening only ceramic knives. Many of the stones you’ll find on Amazon or other retails are made of Corundum, which is a crystalline form of aluminium oxide. It’s a fine choice for a beginner sharpening stone.
Now you may wonder, if a finer stone produces a better cutting edge why do I need a coarse stone at all? The answer is that finer stones work much more slowly than coarse ones. The amount of metal a fine stone removes with each pass is much less than what a coarse stone removes. If you have an edge with a good shape to it from a coarse stone, this is not a problem because the fine stone doesn’t have to remove much metal to improve the edge. If the edge is dull, it will take many times longer to reshape it with a fine stone than it would with a coarse one.