The number of different cell types in the embryo increases as development proceeds.

Cell fate describes the range of cell types a particular cell can give rise to during normal development.

Cell potency describes the entire repertoire of cell types a particular cell can give rise in all possible environments (e.g. a cell can differentiate in an abnormal way if it is experimentally grafted in an ectopic region). The potency of a cell is an intrinsic property and is greater than or equal to its fate.

The fate of a cell depends on its potency + its environment (e.g. its contact with other cells in the embryo).

In animal development, cell fate and potency are progressively restricted (from totipotent to unipotent) until a cell become terminally differentiated (can only form a single cell type). NB. stem cells are an exception because they are never terminally differentiated.

As cell fate becomes restricted following each decision in the developmental hierarchy, cells are said to be committed to a certain fate. In animals commitment occurs in stages.