What is the difference between identity and role based authentication?

"Role based authentication" isn't an industry term. Perhaps you confused it with Role-based access control, which is a method of controlling access to functions based on a users "role", rather than his identity.

For example, a blog system might define an "Author" role and an "Editor" role. An "Author" might have permission to create new stories, but not to publish them. An Editor would have permission to review and modify, and publish existing stories.
Any given user might "belong" to one or more roles on a permanent basis, or might be temporarily granted role authorization during a given session.
But critically, permissions and capabilities are never assigned directly to users, but instead always assigned to roles. Users gain that permission indirectly by taking on a given role. Likewise, a person's credentials are associated with the user account and not the role. Like this:
+-------+    +------+    +------+    +------------+
| human |===>| User |===>| Role |===>| permission |
+-------+    +------+    +------+    +------------+

The system you're describing, with identity and access determined by password alone, is not a role-based system, but instead simply a user-based system without usernames. It's sounds like a particularly bad idea.