Agile Is Both Iterative and Incremental

"What Is Iterative Development? An iterative process makes progress through refinement. An iterative approach to work starts with a rough version of a feature or product, then improves it through repeated cycles-each one getting closer to the final form. For example, a sculptor who approaches work iteratively might begin by roughly carving a block of stone. With each pass, they would refine the form-adding details, smoothing edges, and continuously improving until the sculpture reaches its final shape."

"What Is Incremental Development? An incremental process builds and delivers features and products in pieces. Each piece, or increment, represents a complete subset of functionality. Increments may be either small or large. The focus is on finishing each increment of functionality in its entirety before moving on to the next, with no need to go back and revisit that work later. Each completed increment can be released on its own."

Iterative development makes progress through refinement. Iterative approaches start with rough versions and improve them through repeated cycles, each getting closer to the final form. Incremental development builds and delivers functionality in pieces, where each increment represents a complete subset of functionality and can be released independently. Increments can be small or large, but each is finished in its entirety before moving on. Using sculpting analogies, iterative work refines the whole gradually, while incremental work completes discrete elements one at a time. Combining iterative and incremental approaches allows teams to deliver usable functionality quickly while continuously refining and improving the product.

Read at Mountain Goat Software