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MORPHOLOGY: one of the major types of morphological operation by which new words are formed by adding an affix to a base. EXAMPLE: from the English verb institute it is possible to form the noun institution by suffixation of -ion. From this, one can form the adjective institutional by adding the suffix -al, and to this word one can add the verbalizing suffix -ize yielding institutionalize. Derivation typically, but not necessarily, induces a change in lexical category. Traditionally derivation is distinguished from inflection (the second type of major morphological operation). Although it is not possible to draw a sharp line dividing the two types of operation, there are at least two differences: (i) inflection is never category changing, while derivation typically is, and (ii) inflection is usually peripheral to derivation. Some linguists (e.g. Aronoff (1976), Anderson (1982), Perlmutter (1988)) assume that derivation and inflection belong to different components of the grammar. Others (e.g. Halle (1973), Kiparsky (1982)) assume that derivation and inflection are reflexes of one and the same operation, namely affixation.
LIT. Anderson, S.R. (1982)
Aronoff, M. (1976)
Halle, M. (1973)
Kiparsky, P. (1982)
Perlmutter, D. (1988)

SYNTAX: either the process or the product of applying a set of grammatical rules to a given input. EXAMPLE: S-structure is derived from D-structure by the application of the appropriate instances of affect alpha. Sometimes the notion 'derivation' is used to refer to the set of representations that the grammar associates with a particular utterance, and is equivalent to the notion of a 'grammatical description'.
LIT. Chomsky, N. (1965)

PHONOLOGY: either the process or the product of applying a set of phonological rules to an underlying form. EXAMPLE: in Dutch we may apply auslautverhaertung, degemination and regressive voicing assimilation in that order to the underlying form [hand][duk], resulting in the form [handuk]. Both the application of these rules and the resulting surface form may be referred to with 'derivation'.