The term "Industrial Revolution" describes the process of economic change from a stable agricultural and commercial society to the modern industrial society which is dependent on the use of machinery rather than hand tools. While the process was historically a gradual one and not the sudden change which the word "revolution" suggests, the economic, social, and political results were indeed revolutionary.
Basically, it meant the change from hand work to machine power - made possible by the use of steam for power through the perfection of the improved steam engine of James Watt in 1769, which made Thomas Newcomen's invention of 1708 practical for industrial use. The domestic system of production (goods produced in many homes and gathered for sale by a middleman) was replaced by the factory system. Coupled with the technological advances which first affected the cotton textile industry and the iron and coal industries in England, were the equally significant technological improvements in agriculture.
Historically, the first stage of the Industrial Revolution began slowly about 1760, gathered momentum after 1815, and extended into the 1870s with the main source of power being the steam engine. Profits for the capitalists came from the manufacturing process itself, in contrast to the Commercial Revolution when profits had come chiefly from the transportation of goods. Coal replaced wood as fuel, and iron machines replaced wooden machines.
Later, the second stage of the Industrial Revolution set in during the 1870s and extended to 1914 -- brought about by a new source of power, electricity, from Michael Faraday's dynamo of 1831. Characteristic of this stage was the adoption of mass production techniques and the development of finance capitalism, where profits were derived from the investment of finance capital rather than from the manufacturing process alone, as in the formation of the United States Steel Corporation in 1901. It was in this second stage that the swift industrialization and urbanization of western Europe and the United States took place.
The Industrial Revolution soon carried the middle class to political and economic power -- and at the same time created the greatest threat to capitalism, the rise of the proletariat.