When playing manually, you have full control of where your survivors go to defend the village. This can be rather stressful but has many advantages because you can counter zombie types more efficiently.
For example, the sniper can take out a single big enemy more efficiently than a swarm of smaller enemies. You want someone with a high fire rate or "damage per second" to take out a swarm of enemies.
Every zombie has weaknesses and every weapon has strengths. When playing manually, you can take advantage of those strengths and weaknesses.
Lean back and watch how your survivors run from building to building to defend your village. Especially in early nights, this works very well and it is a more relaxed way to play the game. But you might notice sometimes that "the wrong" survivor is defending an area where another survivor might do a better job.
Please note that your survivors won't use their special abilities in Auto Play. But you can use them without having to leave Auto Play. Auto Play also won't take weaknesses and strengths into account.
This makes this mode semi-automatic. You also can still use gear like grenades if you are about to get overrun.
Which mode is better?
That is for you to decide. We recommend trying both modes to see which fits you better. They both have advantages and disadvantages. You can also switch back and forth between both modes at night so you can always take back control should you notice that the survivors are not defending in the most efficient way.