The term hypothesis is used to refer to an explanation of things that occur. In some cases, it may refer to a simple guess. In other instances it may be a well-developed set of propositions that are crafted to explain the detailed workings of some occurrence or occurrences. One definition states specifically that it is the antecedent to a conditional proposition.
The hypothesis is formed and tested within the scientific process . One may develop the hypothesis while observation is occurring, but that may also be considered premature. The act of observation (outside of experimentation) may actually present opportunity to disprove a hypothesis. The hypothesis though is necessarily well defined and inclusive of details. This allows for accurate testing. It also in many cases distinguishes it from a theory.
The term theory is one of a rather scientific nature, but of a less limited nature. Some uses can refer to explanations of occurrences; some do include usage as referencing a simple guess. There is more though. Theory is used to refer to a branch of study that is focused on the general and conceptual, as compared to the practical and the applied of the same subject. It is significant that a theory is conjectural in nature.
Within the scientific process, the use of a theory is like a working model or understanding of what is occurring. The theory is often developed in the course of observation (in a non-experiment setting). Though, it is further developed by experimenting and the testing of hypotheses, a theory is only a theory. By its existence it maintains its validity. Once a theory is disproved, it is usually dismissed.
An illustration of sorts: If one watches water fall from a table after being spilled, one might develop the theory that water moves toward the floor. Then a hypothesis may be developed that states, water will move toward the flooring regardless of its direction relative to the table. Then testing of the hypothesis might include holding samples of the flooring in numerous directions relatively to the table and then releasing the same amount of water with the same vector on the table. If the water does not move upward from the edge of the table toward the flooring above the table, the hypothesis is incorrect and must be replaced.
Those are the major distinctions of theory and hypothesis and their similarities.
