The Derivation (linguistics) reference article from the English Wikipedia on 24-Apr-2004
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Derivation (linguistics)

Helping orphans the way you would do it
In linguistics, derivation is the process of creating new lexemes from other lexemes, for example, by adding a derivational affix.

Derivational affixes usually apply to words of one syntactic category and change them into words of another syntactic category. For example, the English derivational suffix -ly changes adjectives into adverbs (slow —> slowly).

Some examples of English derivational suffixes:

Derivational affixes do not necessarily modify the syntactic category; they can also modify the meaning. For example, the derivational prefix un- applies to adjectives, healthy —> unhealthy), although it also occasionally applies to nouns and verbs. In many cases, derivational affixes change both the syntactic category and the meaning: modern —> modernize ("to make modern").

Note that derivational affixes are bound morphemes. In that, derivation differs from compounding, by which free morphemes are combined (lawsuit, Latin professor). It also differs from inflection in that inflection does not change a word's syntactic category and creates not new lexemes but new word forms (table —> tables; open —> opened).

For other processes of word formation, cf. conversion and compounding.