The game doesn’t have difficulty options or modes, except that the game includes various tools and mechanics that can drastically alter the difficulty level of encounters. It also is structured in such a way that you have freedom on how or when you engage in most encounters.
Here’s a relatively spoiler-free example. When you first begin the game, there is an enemy called a Tree Sentinel. It’s right out of the gate, and is scaled up to be very difficult. It’s more difficult than any enemies in the entire region, and is meant as a “check.” You have a few ways you can deal with this enemy. You can continually fight the enemy, learn its move sets, and overcome it with trial and error. You can go around it, collect more gear and levels, and fight it again with a numerical/statistical advantage. You can utilize “spirit summons,” which are companions you summon that fight alongside you. You can even choose to enlist friends online to come help you in boss fights and the world. Or, you can even choose to simply ignore it.
In later major boss fights, the game allows you to have NPC companions, beyond or in addition to, your summons. You can choose in these scenarios to allow them to help you fight the boss, which can make the fight easier. It also adds RP flavor to certain fights. Or you can go it alone. It is truly up to you.
The game allows you to explore much of the world at your own pace and to tackle encounters in whatever way you choose. And it gives you many ways to challenge them.
And to circle back to summons, spirit summons are a very powerful mechanic because one of the biggest challenges in boss fights is not getting hit - spirit summons often will tank for you allowing you to either observe movesets to learn, or attack without worrying as much about getting hit. Eventually, you even gain access to the Mimic Tear, which is an AI companion that clones your exact character, from equipment, stats, and spells, only, it eventually will have nearly four times the health as you. In effect, it more than doubles your power level.
Now, a lot of players gatekeep the game due to its difficulty, saying things like, “if you use these xyz overpowered weapons, or used summons, or multiplayer, you didn’t really beat the game,” but they are silly. It’s mostly a single player game and if you had fun, you won.
Personally, I first played the game with summons and powerful gear. As I got better at the game, I stopped using summons, and then used self-imposed limitations (only starting gear, no spells, etc. etc.) just for fun. It was great for role play. But it’s totally optional and up to you how you want to play.
The game is just soooo good.