In system theory, "differentiation" is the increase of subsystems in a modern society to increase the complexity of a society. Each subsystem can make different connections with other subsystems, and this leads to more variation within the system in order to respond to variation in the environment. Differentiation that leads to more variation allows for better responses to the environment, and also for faster evolution (or perhaps sociocultural evolution), which is defined sociologically as a process of selection from variation; the more differentiation (and thus variation) that is available, the better the selection. Talcott Parsons was the first major theorist to develop a theory of society consisting of functionally defined sub-system, which emerges from an evolutionary point of view through a cybernetic process of differentiation. Niklas Luhmann, who studied under Talcott Parsons, took the latter's model and changed it in significant ways. Parsons regarded society as the combined activities of its subsystems within the logic of a cybernetic hierarchy. For Parsons, although each subsystem (e.g. his classical quadripartite AGIL scheme or AGIL paradigm) would tend to have self-referential tendencies and follow a related path of structural differentiation, it would occur in a constant interpenetrative communication with the other subsystems and the historical equilibrium between the interpenetrative balance between various subsystem would termine the relative degree in which the structural differentiation between subsystem would occur or not. In contrast to Luhmann, Parsons would highlight that although each subsystem had self-referential capacities and had an internal logic of this own (ultimately located in the pattern maintenance of each system) in historical reality, the actual interaction, communication and mutual enable-ness between the subsystems was crucial not only for each subsystem but for the overall development of the social system (and/or "society").

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