"Real" Tea: A beverage made from some part of the plant Camellia sinensis or its varying cultivars. Usually, this involves pouring hot water over a bag containing the plant parts (in a process called infusion). Camellia sinensis contains caffeine. The variations (in order of most common caffeine content, although it varies) include:
~black: mature leaves, wilted, crushed, fully oxidized, more caffeine
~oolong: mature leaves, wilted, bruised, partially oxidized
~green: mature leaves, unwilted, unoxidized
~white: buds and young leaves, wilted, unoxidized, less caffeine
Herbal Tea: Technically called a tisane, this is any infusion that does not contain Camellia. It can be made with any kind of plant material. Common types are Mint, Chamomile, Lavendar, or Ginger. In some cases, the ingredients used are chosen for their health properties or medicinal use in folklore. If an herbal beverage is made for medicinal purposes and is intended to be very strong, it may be made by putting the herbs into cool water and slowly bringing everything to a boil, rather than pouring hot water over the herbs. This is called a decoction.
Ceylon Tea: This is often confused as its own category of tea. In actuality, it is tea (from Camellia sinensis) that has been grown in Sri Lanka, a country roughly the size of West Virginia (but with 20 times the population). Depending on the harvesting stages, you can have Ceylon tea in black, oolong, green, or white varieties. The difference is the Sri Lankans have as much of a passion for tea as I do, and over 215,000 people are employed in the country's tea plantations to pick the tea leaves by hand, resulting in added flavor, without the bulk of twigs and plant parts that do not affect the taste of the tea. (This is a common problem for machine-harvested tea.)