It can be characterised as the splitting of a broad task into subtasks, each of which is then assigned to a worker who specializes in carrying out that subtask. Adam Smith's original example was the making of pins.
The specialization and concentration of the workers on their single subtasks often leads to greater skill and greater productivity on their particular subtasks than would be achieved by the same number of workers each carrying out the original broad task.
The is the chief source of productivity gain in Smith's thinking. In modern economic theory, that role has been taken over by overall technological progress.
Increasing specialization may also lead to workers with poorer overall skills and a lack of enthusiasm for their work. This viewpoint was later extended and refined by Karl Marx. He described the process as alienation; the workers become more and more specialized and work repetitious and that would eventually lead to a complete alienation.
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