The line between the two can shift, depending upon perspective
Although there are rules (for light to medium copyediting) and principles (for line or developmental editing) to be followed, editing is more art than science. The deeper into a piece an editor goes, the more interpretative the work. There may be only one or two ways to punctuate a particular phrase or clause both correctly and well, three or four ways to most successfully rephrase a sentence. But when it comes to restructuring a chapter or section — or an entire book — a group of editors each working individually might find as many ways to conceptualize the restructure as there are editors in the group. Add in revising and augmenting the text, and you’re looking at an almost infinite number of ways of approaching the task.
The levels of edit are distinguished, to some extent, by where in the process the work falls. Is this early on, with the ms only in first or second draft? Or has the work been through extensive editing and revision and is it now nearly final? If the project is progressing according to plan, with staged drafts, the level of edit might well be correlated with schedule.
But the levels are distinguished also, in a deeper, truer sense, purely by what the text needs to become the very best that it can be: the inherent condition of the text itself dictates (in an ideal world) the level of edit needed. Is the work well structured and is that structure clear? Does the work successfully address the exigencies of subject matter, audience, and purpose? Is the writing crisp and clean and well paced? Is it smooth, does it flow? Does it engage? Does it express the thoughts intended clearly, without misstep or misinterpretation? Without misplaced emphasis? Are the mechanics all in order? Syntax, grammar, usage, punctuation, caps, and so on.
What can differ, in different writing and editing environments, is who is charged with deciding the exact changes to be made. It is always the editor’s task to diagnose. It may or may not be her task to determine also the remedy.
Most traditionally, the editor’s jurisdiction is correctness and appropriateness, and the writer owns the text. (See also When to do, when to ask.) This division can sometimes translate to the editor owning light copyediting on up to the most superficial aspects of the text, with the writer owning medium copyediting and deeper. In this conception, if the editor is working in the realm of improving (rather than correcting) some aspect of the work — which typically means also that any one of a number of potential fixes might resolve the issue — she is working in the realm of suggestion. She may propose, even recommend, a particular solution. Or perhaps offer two or three possibilities. For a recurring problem, she may model one or two solutions and then leave the writer to resolve the rest on her own. Along with diagnosis and remedy, naturally, she is explaining as needed to make clear the issue and its ramifications.
That has often been the approach in traditional publishing, most particularly when what the author is producing will not fit within a series, must not also conform to another set of standards.
In other contexts, the editor may be given more authority over the text. This is often the case when there is another set of standards to which the work must adhere and it is often the case also with corporate writing, where the corporate employer or client (and not the writer) owns the rights to the final work. In writing for hire, it is often the editor who makes the final call.
Circling back to the central question, we might now ask: When is developmental work in a text editing? When ghosting? And perhaps also, when does one shade instead into the other?
At any level of edit deeper than, say, light copyediting (about which there is generally little controversy), there is this potential division of labor, this potential division of role. Following the editor’s review, it may be the writer who is working through the text, deciding upon and implementing the actual changes. Or it may be the editor. It all depends upon the editing context and the expectations of that context. But it is only at the level of developmental work that this division of role has such deep ramifications that the nature of the work itself depends upon it. Is the editor analyzing, suggesting, modeling, with the writer then making the decisions and doing the work? Or is the editor herself stepping in to effect those changes? Does she not only diagnose, but remedy? Is it she who restructures the text, revises the writing, in the process perhaps undertaking original research, perhaps adding entirely new thoughts to that writing?
In many contexts, the former is considered developmental editing, the latter ghostwriting. In these contexts, the determining factor is who is taking ownership of the changes, who is deciding precisely what changes to apply and how, who is reshaping the work, reshaping the text — upon who is doing, as it is sometimes called, the “heavy lifting.” At the end of this process, the draft can look very different indeed, its very character changed. At the end of this process, the work can be on an entirely new and different trajectory.
In other contexts, the work isn’t called ghostwriting unless the writing is entirely from scratch. The ghost may interview the author, may work from rough notes (but nothing like a draft) or an outline, some sort of vision, but it is the ghost who is putting pen to paper, as it were, from the very start. In these environments, if a draft is developmentally reworked by an editor, that work is given its own designation: rewriting. Such work is distinct, in this context, both from a developmental edit and from ghostwriting of the sort that begins from scratch, with research or reporting.
In either context, when the work of a developmental edit extends beyond the point of analysis and diagnosis to determining (and implementing) each and every fix, to taking over the draft in the manner of a writer, that work is given a distinct label. It is no longer editing. Is it ghostwriting, every bit as much as beginning from scratch with only source material to work with? Or is it rewriting, distinct from that other brand of ghosting? It all depends on your foundational sensibilities. Editors will tend to consider that work another species of writing. From-scratch ghostwriters perhaps as something a little less. Either way, it’s work in the name and voice (or sometimes enhanced voice) of another.