Fine Art vs. Decorative Arts
While the term Fine Art and Decorative Art both contain the word "art," they are very different in nature.
In the strictest sense, Fine Art is considered a visual object with no functional purpose except to be admired and contemplated as an aesthetic object. Decorative Art, however, is also visual and aesthetically pleasing but serves a useful function such as a piece of furniture, tableware, textiles and so on.
According to the Online Etymology Dictionary, the word 'art' came into use as an English word in the 13th century, having been borrowed from the Old French in the 10th century which meant "skill as a result of learning or practice."
However, in its earlier usage, it can be traced further back because the word 'Art' actually originated from the Latin word 'Artem' (ars) which means "work of art, practical skill, a business or a craft."
The concept that 'art' means 'skill' continues today and contributes to the ongoing debate regarding some museum-worthy modern and contemporary art pieces and whether or not they constitute art. An example is Claus Oldenburg's massive BLT sandwich owned by the prestigious Whitney Museum in New York. The Whitney considers this 'art' but many traditionalists (who prefer Renoir and the other Masters) do not.
The term 'decorative art' can be traced back to London's Arts and Crafts Exhibition Society, 1888.
Historically called the visual arts, Fine Art is made by artists and exhibited in art galleries and museums and purchased by art-lovers with deep pockets at auctions at major art houses like Sotheby's and Christie's. Fine art takes many formats including paintings, sculptures, drawings, prints and lithographs, photography and installation art. Starting in the 20th century, due to electronic advances, fine art came to include sound art and digital and video art and is considered to be ephemeral and conceptual in nature.
The definition and meaning of Fine Art are constantly evolving. For example, today many people consider Andy Warhol's silkscreened Brillo Boxes as Art and these pieces by the late artist fetch sales in the double-digit millions. Pushing the envelope even more, Italian artist Piero Manzoni's Merde Artiste (an artist whose works feature cans of his own fecal matter) creates pieces classified as Fine Art.
Decorative Art is also made by artists, but because they are specialized in their craft and need to produce functional art they are widely known as craftsmen and craftswomen. Pieces that fall into the Decorative Art(s) category include a wide range of materials and techniques such as woodworking, metalwork, textiles, and ceramics. Functional objects including candlesticks, furniture, carpets, weavings, pottery, cutlery, and other beautiful but useful objects, are considered part of the Decorative Arts category.
It's worth noting that even the world-renown Metropolitan Museum of Art (home to the most important Old Masters like Rembrandt) has rooms filled with furniture, tapestries, and ancient Grecian urns and bowls.
What is the difference between Commercial Art and Fine Art? This question takes a look at Warhol's Brillo Boxes mentioned above.