Large-cap: India's top 100 companies. Think Reliance, TCS, HDFC Bank. Slower growth, but also fewer nasty surprises. Good starter positions.
Mid-cap: companies ranked 101 to 250. Still established but with more room to grow. More volatile — up 40% one year, down 25% the next is normal.
Small-cap: everything below the top 250. Can double in a good year, halve in a bad one. Best used sparingly and with real research.
Rule of thumb for beginners: put the majority of your money in large-caps until you understand your own tolerance for volatility.