It is very important to make the distinction that ulterior motive of the martial exchange is victory; else the exchange may be classified as education or dance, but it cannot be called martial. It is also important to note that victory does not necessarily equate to destruction or even domination — it simply means that one party's intention is brought to fruition despite an opposing party's resolve, and may even appear submissive, manifesting as escape or evasion, provided it works for future advantage. To fulfill this objective, the martial arts are often studied in dichotomy: On the one hand, they are explicated through the orderly rehearsal of systematic technique, and on the other, they are implemented through the chaotic progression of contest. Both approaches fuel each other like a pair of churning gears, and without either a martial system may be classified as a discipline or skill, but it cannot be labeled as art.
In the Japanese martial arts, ordered practice is called kata, which literally means "form." It's Chinese equivalent is taolu, and it's Korean equivalent is poomsae. Essentially, form is the manipulation of a body in order to achieve a specific goal. These manipulations define the manner in which the martial art may move, transition, and generate power, and are often practiced solo in martial arts like karate, tae kwon do and tai chi chuan, or practiced with a partner in martial arts like judo and jujutsu.
Kata emphasizes perfection and principle and adheres to strict guidelines that should not be blurred. It is designed to simulate a martial exchange between two or more individuals, and to provide examples of solutions to common martial problems — such as a response to a strike, grab, or some other potential threat. Buried within these solutions is the essence of the martial art. Though dedicated study and familiarization of form, the martial artist learns to function within the framework established by the kata. The goal, then, is not to accumulate a mass of specific solutions to ply against specific attacks, but pursue victory within the boundaries described by the form. In other words, it is about technique — not, about techniques.
On the reciprocal, free practice in the Japanese martial arts is called randori, which literally means "chaos taking." Randori emphasizes spontaneous change and development, the solution of puzzles on the fly, and the complication of an opposing party disputing every move. In English we would call it sparring, but I think randori is a better word because of the meaning it semantically implies. During randori, it is the martial artist's objective to perpetuate chaos upon the opposition in order to perplex, deceive, overcome or overwhelm, so that victory may be taken decisively.
But paradoxically, victory cannot be taken decisively during randori without an understanding of technique, and technique cannot be understood without the interaction of randori. Thus over time, these apparently opposite studies begin to meld together and lose their distinction as opposites. During an exchange, victory may manifest as a legitimate technique not because the martial artist intended to do that technique, but rather because the martial artist moved, transitioned, or generated power in a manner prescribed by the form. So even though kata and randori approach of the martial arts from opposite angles, they study components that exist in unison during the actual exchange. The martial artist whose randori looks like kata and whose kata looks like randori has truly realized this distinction: That the heart of the exchange in the martial arts is the maintenance of order in the self — via the framework of kata — and the instillation of chaos in the opposition — via the interaction of randori.