I\'m using Vim 7.4 on Windows 7.
I do have a custom _vimrc file, but both Vim and gVim work fine. When I try to run vimdiff .\\xxxxx .\\yyyyy, it gives the
Vim 8.1
I was experiencing this issue, and this answer resolved it for me.
Add this to your ~/.vimrc
set shell=$COMSPEC
For me using git for windows, this value is: C:\WINDOWS\system32\cmd.exe
Also note that in this thread every answer other than the top answer relates to changing your shell variable. So if you're someone who has stumbled upon this answer, try taking a look at that.