The difference between the two lies in the way the egg is fertilized.
In case of identical twins, a single egg divides into two cells and develops as two babies. These can be girl-girl, girl-boy or boy-boy, but the twins are totally like each other in looks and even in mannerisms.
In case of fraternal twins, two eggs are fertilized by two different sperms and each develops into a baby. The sexes of babies could be again like I mentioned above, but the twins in this example may or may not resemble each other.
"I am free of all prejudice. I hate everyone equally." - W. C. Fields :)
Identical twins arise from a single fertilized egg that for some reason split itself in two. Identical twins have exactly the same genetic make-up.
Fraternal twins arise from two separate eggs. Sometimes both of a woman's ovaries will produce an egg cell at the same time. Each of these is fertilized by a separate sperm cell (of which there are always plenty) so they have different genetic make-up. They may share the same womb and be born at the same time but are no more closely related than true brothers.
