Readers of The Lord of the Rings (LotR) narrative may be aware of two kind of elves: wise and magical High Elves, such as Gildor, Glorfindel and Galadriel; and ordinary Silvan ('Wood') Elves such as those majority of Mirkwood and Lothlorien elves (of whom we 'meet' Haldir and his brothers) .
But it is only in the Appendices that there is any inkling of an explanation that there are also Sindar or 'Grey' elves, such as Cirdan, Thranduil and Celeborn - apparently 'in-between' the High and Silvan.
With the Simarillion, it became apparent that there was a very complex 'family tree' of elves - and that this has been extremely important in the history of Tolkien's world ('Arda'), including Middle Earth.
This was the Sundering of the Elves - and was the way in which an originally unified society of elves (albeit in three tribes) was divided and differentiated. Divided - by being physically separated; and differentiated - because this separation had further consequences in terms of accentuating differences.
Briefly, and simplified; what happened was that the elves came to exist in Middle Earth, but deep in history the Valar invited all the elves to come to live in the Undying lands due to the threat of Morgoth.
There was a Great Journey by which some of the elves travelled from east of the Misty Mountains (which were at that time a vast, almost impassable barrier) west across Middle Earth, across the sea, to the Undying Lands.
At each stage of the journey, some elves either refused the call of the gods, or turned aside, or delayed.
Therefore the elves could be arrayed along a line between the highest of High Elves, the Vanyar - who obeyed the call and did everything perfectly right - and the Avari who refused the call of the Valar, stayed in Middle Earth, and did not even begin the Great Journey.
But it should be said that the summons by the Valar may itself have been wrong*. It may be that to remove the elves from Middle Earth, where it had pleased Eru Illuvatar (the One) to create them, was misguided; and revealed a lack of trust in God, or an excessive fear of Morgoth.
It may have been The Divine Plan that - in some way not known, because it was never allowed to happen - the tragic story of the elves would have been averted or ameliorated by Not summoning, and dividing, them.
Maybe the unwilling, 'wild' Avari elves were correct in remaining, and not even starting the Great Journey? However, their motivation of the Avari for refusing the call may not have been good, and that seems to have been confirmed by their lesser wisdom, powers, and their sad eventual fate; which was to dwindle, fade and become discarnate spirits, indistinguishable from ghosts...
So, the major divisions of elves were initially between the Avari - who refused the journay, and the others who began it. Then at the Misty Mountains, another group called the Nandor adandoned the journey - whose remnant at the time of LotR was the Silvan elves.
Then among those who crossed the Misty Moutains - a further group called the Teleri lagged behind the main group of Noldor and Vanyar. The Teleri split into those who later went on to the undying lands to join the Noldor and Vanyar as the High Elves (those who had lived in the primordial light of the Two Trees) - and the Sindar/ Grey elves who remained on Middle Earth.
What is interesting, and has been hard for me to understand, is the 'mechanism' by which elves attitudes-to and experience-of the Great Journey became associated with different 'levels' of power and wisdom - that that these differences became hereditary.
How did the Great Journey lead to permanent differences between High, Sindarin, Silvan and Avari elves? Differences so lasting that the - although later in history the Silvan and Avari became intermingled and indistinguishable in lifestyle - the Silvan elves had a latent desire to Go West, and were allowed to.
The main 'explanation' seems to be related to 'light'; to a sense in which the Great Journey was to the West facing the divine light of the Two Trees. Presumably this attitude to light and the light itself combine to make a permanent and hereditary change in the constitution of the elves?
This is, at least, how I tried to understand it. The key to this explanation is that the sundering was something mostly done-to the elves - the elves were transformed-by 'light'.
They made choices; but and then the light affected-them as a consequence.
I personally find this unconvincing and incoherent - but until recently I could do no better.
While I can immediately see that dwelling in the undying lands, bathed in the light of the Two Trees, could have an ennobling effect on elves - I don't see that light could do this when the elves were still in Middle Earth, and when it relates to what seem like small differences in decisions along a journey.
In particular, I find it hard to understand how the Sindar were made wiser and more powerful (a 'natural aristocracy' among the Silvan elves) merely by starting-out on the Great Journey, getting across the Misty Mountains... but then deciding to stay in Middle Earth. It is hard to see how this experience could have such a significant and hereditary effect upon the group.
Why were the Sindar so different from the Silvan elves, when both left the Great Journey - and the difference was only derived from which side of the Misty Mountains this leaving happened. (It seems fanciful to suppose that the tall mountains shielded the Silvans from the remote influence of 'the light' - although I suppose that is one possibility...)
Also, it seems to be unjust, or arbitrary, that later generations of elves should be rewarded or punished for the attitudes of their ancestors. Why should Avari elves be forbidden to take ship to the Undying lands (As I believe was the case), when indistinguishable Silvan Elves have this privilege?
The idea I developed (in conversation with my son Billy) is that the Great Journey worked on the innate spiritual predispositions of the elves, to separate-out the spiritually various types of elves which were originally mixed. If there had been no call from the Valar; this mixture of 'highly' spiritual, middlingly spiritual, and unspiritual elves would have remained in a single society.
Having made this separation, then the fact that the different innate types lived in different environments (as a consequence of their previous decisions) amplified these differences.
Think of it as a paper chromatography strip (as in the illustration above). Originally all elves of all types were mixed; but the trials, fears, temptations of the Great Journey from East to West, separated and spread-out the elves across Middle Earth - a bit like the colours on the chromatography paper.
Those elves who had no interest in change, who feared change, who wanted to remain innocent (and ignorant) hunter gatherers, or who did not have any interest in the gods; simply refused to begin the journey.
And those with greatest natural affinity for the light - those elves who were already, innately, the most like to the Valar and who, therefore, wanted to become even more like the Valar - were motivated to continue to the end of the Journey.
And some, like the Sindar, had some of the traits of the Valar, and a significant - but not overpowering - desire to develop these traits. They went some way along the journey - but were not 100% committed to the idea. After being delayed (when their Lord - Thingol - went missing) perhaps they liked the new regions in which they found themselves?
In the end, they changed their minds, and decided to remain in Middle Earth - but now (with the departure of the high-er elves than themselves overseas) they found themselves the 'top elves' in Middle Earth! Perhaps this 'removal of superior competition' was itself a reason to stay?
After all, the portion of their Teleri kindred who did cross the sea found themselves at the bottom of the status hierarchy in Valinor; and perhaps as a result kept themselves apart from the gods, Vanyar and Noldor - living on the coast beside their ships, and specialising in the natural abilities of lyrical poetry and singing; rather than the higher attainments of being-godlike (Vanyar) or arts and crafts (Noldor).
By staying in Middle Earth, and developing their own 'middle'/ Grey elvish cultures; the Sindar became (until the Noldor returned) the undisputed masters of the free peoples of Middle Earth; and built some great cities/ civilizations - especially Doriath, ruled by their High King, Thingol Greycloak (who was technically a High Elf, being (I think) the only Teleri elf to return to Middle Earth from Valinor).
In sum, therefore, it seems that the Great Journey's primary function was to sort and separate-out the different types of elves; who had always been present, but previously were mixed together. Having been separated, these differences became accentuated - and the elves become more of what they already were.
In some cases this may have been harmful. Probably, the Avari were harmed by the removal of their 'higher-motivated', more able brethren. At any rate, by the LotR they seem to have disappeared, or merged with the Silvan elves. An analogous 'cultural stunting' may have affected the left-behind Silvan elves; which may explain why they were willing - indeed keen - to be ruled-by Sindar or Noldor elves.
The Noldor elves developed their artistic and 'scientific'/ technological talents to a very high degree; but perhaps their concentration, and exclusion of other elvish influences, also led to the pride, possessiveness and desire for power, which afflicted so many of them - notably the greatest: Feanor and some of his sons; and his descendent Celebrimbor, who made the Dwarven and Men's rings of power; helped by Sauron.
The residue of Silvan elves who began the journey, but were quickly daunted from completing it - became much like Avari - except for a latent desire to cross the sea to the undying lands, and (presumably) the capacity to fit-in when they got there.
This 'Yearning for The West' trait was, like most traits, inherited down the generations; and, although not strong, it could be awakened (as with Legolas, a Sindar) by seeing the sea, or hearing gulls. Awakening of sea yearning became more likely as Middle Earth grew less appealing - from the tainting by Morgoth and Sauron, the fatigue and fading of the elves in mortal lands, and from the increasing domination of Men (or orcs).
The Sindar experienced this increasing yearning more strongly than the Silvans, from having had it more strongly to begin with; and by the time of Lord of the Rings, there were few of this race remaining.
Nonetheless, the desire to cross the sea was weaker in the Sindar than in the Noldor, who had lived in Valinor. Thus the Noldor elf Galadriel went West shortly after the death of Sauron; while her Sindar husband, Celeborn, remained in Middle Earth for a while longer; his ties to Middle Earth being stronger and his desire for The West weaker.
*On page 259 of Unfinished Tales, there is a comment that Oropher - father of Thranduil and grandfather of Legolas - arrived in Mirkwood with a few other Sindar (disillusioned and disaffected after the run of Doriath); and despite becoming their Lord; he deliberately adopted the language of the Silvan elves and 'merged' with them culturally. Tolkien says, Oropher and his companions wished 'to become Silvan folk, and to return, as they said, to the simple life natural to elves before the invitation of the Valar had disturbed it.'