There are various conflicting definitions of "dumb terminal" but as time goes by, more and more terminals are called dumb. This document mainly covers text terminals which display only text on the screen. It could have been titled "Dumb-Terminal-HOWTO". But in some magazines articles, any terminal, no matter how smart, including ones which present a full graphical user interface (GUI), are called dumb. If all terminals are "dumb" then there is no point of prefixing the word "dumb" to terminal (except as a sales pitch to sell computers or the like instead of terminals). Due to the ambiguous meaning of "dumb terminal" it is not classified here as a type of terminal.
For a text terminal, a 2-way flow of information between the computer and the terminal takes place over the cable that connects them together. This flow is in bytes (such as ASCII) where each byte usually represents a printable character. Bytes typed at the keyboard go to the computer and most bytes from the computer are displayed on the terminal screen. Special control bytes (or sequences of bytes) from the computer tell the terminal where to move the cursor to, what to erase, where to begin and end underlining and/or blinking and/or bold, etc. There are often hundreds of such special commands and most terminals can even change fonts.
The communication uses characters (letters) encoded using a code chart for the character set being used. Usually, the first 128 bytes out of 256 possible bytes use ASCII codes. Terminals for Unix-like systems, normally connect to computers via a cable running between the asynchronous serial ports (RS-232-C = EIA-232-D) of the host computer and the terminal. Sometimes the connection is via modem or terminal server, etc.
Other names for "text terminal" are "general purpose terminal", "general display terminal", "serial monitor", "serial console" (if it's used like a console), "serial terminal", "dumb terminal", "character-cell terminal", "character terminal", "ASCII/ANSI terminal", "asynchronous terminal", "data terminal", "video terminal", "video display terminal" (VDT), and "green terminal" (since many used green displays). These names (especially "dumb terminal") are sometimes used to mean emulating a text terminal on a PC with a command line interface such as Linux. In olden days "video display unit" (VDU) meant text terminal but strictly speaking, it excludes the keyboard.
"Block mode" was used exclusively by old IBM mainframe terminals but many modern terminals also have this capability (which is not used much). In block mode, the characters you type are temporarily retained in the terminal memory (and may possibly be edited by a built-in editor at the terminal). Then when the send key (or the like) is pressed, a block of characters (sometimes just a line of characters) is sent to the computer all at once. Block mode (as of late 1998) is not supported by Linux. See section Block Mode.
Many text terminals can display bit-mapped images, but not in color. Unfortunately, the popular image formats used on the Internet are not supported. The protocols for terminal graphics include: Tektronix Vector Graphics, ReGIS (DEC), Sixel (DEC), and NAPLPS (North American Presentation Level Protocol Syntax).
Even without bit-mapped images, ordinary text terminals can sort of display images. One may form arrows <--- and draw boxes with |__|, etc. With special graphic character sets that have a lot of special characters for line drawing, much more is possible. But even without a graphic character set, one may produce "ascii graphics" art. The term "graphics terminal" usually means a terminal that can display bit mapped images. However, this term is sometimes applied also to text-only terminals since text is a limited form of graphics.
There are two basic types of graphics displays: raster and vector (rarely used). Raster graphics (bit-mapped) puts dots on the screen by horizontal scan lines drawn by an electron beam (or by activating pixels or dots on a flat screen). Vector graphic displays were intended to be used for monochrome screens that don't have any dots. They use smart electronics to draw lines and curves with an electron beam that can continuously move in any direction (just like a pen or pencil). True vector graphics draws high quality lines without noticeable zig-zags but is both rare and expensive. For more details see http://www.cca.org/vector/. Raster graphics is almost universally used today for both PCs and text terminals. For PCs, images encoded in vector graphic format can't be drawn as continuous lines due to the electronic limitations but they can be translated to raster graphics format for display (with a resulting drop in image quality).