Master Detail Relationship
Also known as parent-child relationship.
Child Object Records cannot exists without parent record that means master detail relationship field is mandatory field on child objects page layout.
Properties and behaviour of child object records are controlled by parent object records.
When to Create Master Detail Relationships ?
When you want child object record to be deleted when its associated parent record get deleted.
For Ex: Student and School objects •When child record cannot exist without parent.
It is one to many.
Points To Remember
Master detail relationship in salesforce is achieved by creating master detail type field on child object which is linked to parent.
Whenever master detail relationship is created, child object records owner field gets deleted and its owner is derived from parent record.
Sharing and security of parent object record is inherited by child object records.
Allow reparenting checkbox.(unchecked by default).
Standard object cannot be on detail side of master detail relationship
Lookup Relationships
Child record can exists without parent, that means, lookup field is not a mandatory field on child object.
Field is created on child object.
Owner is not changed.
Sharing and securities not inherited. It is one to many.
Types of Lookup Relationships
Self Relationship
A lookup relationship referring to same object.
Example: Employee referral field on Employee object
Hierarchical Relationship
A Self lookup relationship on user object
Important Point
You Cannot create master detail relationships on existing object if records already exists. You have to create a Lookup relationship first, populate lookup fields with data in all records and then change the relationship type to Master-Detail.
Please check below video for detailed explaination :
Knowledge Predator 