The slitters (round, rolling blades like a pizza cutter, minus the serration) on a newspaper web press can make a newsprint roll come out as either a broadsheet or a tabloid, depending on the preferences of the customer. A broadsheet is known in the pressroom as a "half-fold" and a tabloid is a "quarter-fold." An "eighth-fold" or "flexi" is a publication that's half the size of a tabloid; this is the popular configuration for job and real estate guides, typically given away for free at newspaper stands. It's also the approximate size for comic books and magazines, although few of these are printed on web presses anymore; their print runs and color requirements tend to warrant sheet-fed presses instead.
The most prestigious newspapers, like The New York Times and The Washington Post, are printed on broadsheet. Cheesy supermarket-stand papers like National Enquirer are tabloid, as are the more lurid news dailies like the New York Post. Newspapers in smaller towns can use either format, and some newspapers (like the Washington Examiner or independent weeklies like The Village Voice or Seattle's The Stranger) favor tabloids because they can be read easily on buses or in subway seats. But the format is unfairly associated with headlines like "Headless Body Found in Topless Bar."
Broadsheet refers to a newspaper 11 inches wide and 20 inches long in dimension thus the term “Broadsheet”. These types of newspapers use traditional approach to print journalism where they prefer serious expressions and in-depth coverage in their stories. These types of newspapers focus on unbiased news stories that are factual. The titles to the stories are normally long in an attempt to capture the facts of the story.
Tabloids refer to newspapers that are 11 by 17 inches in dimension and are normally smaller than their Broadsheet counterparts. They have shorter stories and employ short titles which are mostly sensational. The tone of the stories may not be serious and such newspapers prefer the use of slang, for instance using cop to refer to police. Tabloids print controversial or dramatic stories that may not be factual, in this case celebrity gossip.
As the above answer states, tabloids are smaller in size than broadsheets and generally tend to emphasize different subjects: subjects that might be regarded as being lighter, or less taxing, than those dealt with by broadsheets. However, that is not to say that tabloids don't tackle more serious topics also, but their approach tends to be different (as discussed below).
Furthermore, broadsheets will tend to deal more with goings-on in the wider world whereas tabloids will mostly stick with topics closer to home. Tabloids would focus more on, say, a national murder case while broadsheets would place more emphasis on international politics.
There is another, very important difference between tabloids and broadsheets generally: the use of language and tone. It is fair to say that tabloids use much more colloquial, emotive and even provocative language than broadsheets, and generally come up with more sensationalist and lurid headlines. They want to appeal more to readers' emotions, whereas the broadsheets use a more objective and formal style designed to appeal more to reason and intellect.
The terms tabloid and broadsheet refer primarily to different types of newspaper classified primarily on the basis of the size of paper used. Tabloids are substantially smaller than broadsheets. There is no established standard for the size of the newspapers but generally the size of tabloids is 11"x17", while that of broadsheet is 11.75"x21.5".
There is fixed rule regarding the type of reading material contained in these two type of papers, but the tabloids generally tend to contain information on less serious matters such as entertainment and fashion, while broadsheet are primarily devoted to news on serious matters such as politics, government, business and industry.