Basic Scientific  Description
Normally, we consider matter to have three distinct states: solid, liquid,  and gas. However, there are states of matter which do not meet the necessary  requirements of any of these three categories. For example, a substances such as  mayonnaise is somewhere between a liquid and a solid.
Liquid crystals are also not quite liquid and not quite solid. Physically,  they are observed to flow like liquids, but they have some properties of  crystalline solids. Liquid crystals can be considered to be crystals which have  lost some or all of their positional order, while maintaining full orientational  order. For example, imagine a large number of toothpicks put into a rectangular  box and shaken. When you open the box, the toothpicks will be facing in about  the same direction, but will have no definite spatial organization. They are  free to move, but like to line up in about the same direction. This is a  primitive model for nematic liquid crystals.
Nematic Liquid  Crystals
Nematics are polarizable rod-like organic molecules on  the order of 20 Angstroms in length. Because of their tendency to organize  themselves in a parallel fashion, they demonstrate interesting and useful  optical properties; the digital watch you used to wear back in the 80's  functioned using nematic liquid crystals. Today, many more useful and  interesting properties of nematics are known and exploited.
Smectic Liquid  Crystals
Smectic Liquid crystals are different from nematics in  that they have one more degree of orientational order than do the nematics.  Smectics generally form layers within which there is a loss of positional order,  while orientational order is still preserved. There are several different  categories to describe smectics. The two best known of these are Smectic A, in  which the molecules align perpendicular to the layer planes, and Smectic C,  where the alignment of the molecules is at some arbitrary angle to the  normal.

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