Among the factors which distinguish the two and mark the progression of early man from hunter-gatherer societies to settled societies: (1) the ability to produce a surplus of food and (2) specialization of labor. The two are well connected. A third, equally important factor is specialization of tools and weapons.
Hunter-gatherer societies survived on a subsistence level, often following herds of game animals or areas where edible vegetation could be found. There was no ability to store excess food, and starvation was a much more likely outcome in day to day life than surplusage. With the advent of superior tools and weapons, humankind of the neolithic era were able to not only develop agriculture but were also able to domesticate animals for both food and work purposes. Cattle, sheep, even horses were domesticated and perform tasks such as pulling plows which enhanced agricultural production. Surplus vegetable food could be stored, and animals kept until needed for slaughter, thus there was no longer a need to move from place to place. Settled developments thus first appeared. Also, with excess production, it was possible for one to trade his excess to another, thus leading to specialization of production and labor.