Stem cells has the potency to differentiate into specialized types of cells. The higher potency to differentiate to lower follws the order of Totipotent, Pluripotent and Multipotent.
They can differentiate into embryonic and extraembryonic (placenta) cell types and also can enter the germ-line. They have the ability to replicate in unlimited numbers without losing their total potency. Such cells can construct a complete viable organism. These cells are produced from the fusion of an egg and sperm cell. Cells produced by the first few divisions of the fertilized egg are also totipotent.
They are the descendants of totipotent cells and can differentiate into nearly all cells, i.e. cells derived from any of the three germ layers (ectoderm, mesoderm, and endoderm) but not extra-embryonic tissues such as the placenta. They possess capability produce any cells or tissue a body needs to repair. Embryonic stem (ES) cells and induced pluripotent stem (iPs) cells are pluripotent stem cells.
They can’t differentiate into a number of cells, but only those of a closely related family of cells present in a tissue or organ or a particular lineage. They are essentially committed to produce specific cell type.