What is the difference between a basement and a cellar?

A basement generally has enough ceiling height and finish potential to count as usable, sometimes habitable, living space once it meets code, while a cellar is typically lower-ceilinged and built mainly for storage or housing mechanical systems like a furnace or water heater. Habitable basement space usually needs proper egress and ceiling height to be permitted as living area, which a cellar rarely meets without major renovation. The distinction matters most when someone wants to finish or rent the space.