POWER is the ability to achieve purpose. — from a 1967 sermon by the Reverend Dr. Martin Luther King, Jr.
AUTHORITY is conferred power to perform a service. This definition will be useful to the practitioner of leadership as a reminder of two facts. First, authority is given and can be taken away. Second, authority is conferred as part of an exchange. Failure to meet the terms of the exchange means losing one's authority: It can be taken back or given to another who promises to fulfill the bargain.
AUTHORITY can be conferred in two forms: formal and informal. With FORMAL authority come the various powers of the office, role or position. With INFORMAL authority comes the power to influence attitude and behavior beyond compliance.
FORMAL authority is granted because the officeholder promises to meet a set of explicit expectations (job description, legislated mandates).
INFORMAL authority comes from promising to meet expectations that are often left implicit (expectations of trustworthiness, ability, civility). — adapted from Leadership Without Easy Answers by Ronald A. Heifetz (Cambridge, Massachusetts: The Belknap Press of Harvard University Press, 1994), pp. 57 and 101.