Many street names are decided upon deep within city hall, but how do they come up with what type of street it will be?
According to an article recently posted on mental_floss here's the reasoning 
behind the nomenclature.
Traditionally a road runs between 2 points (think town to town or county to county) while a street is traditionally a paved road with houses, buildings, trees and shrubbery within a town.
Here are the definitions for some other types of street names.
Avenue - Avenues are usually straight roads lined with trees or bushes. The idea is to emphasize arriving at a feature within the town.
Boulevard - Boulevards are similar to Avenues, but are usually muti-laned, featuring a median and landscaping. Usually sidewalks are on either side. Houses or other structures are normally found there as well.
Court - A court is typically a short street ending in a dead end or a cul-de-sac.
Drive - This "street" term is usually short for driveway or it can be a private road. Some Drives refer to roads that are not very straight, but may be scenic.
Expressway - These are divided highways where traffic moves at a high rate of speed.
Freeway - Similar to an expressway, but intersections are usually overpasses and underpasses.
Highway - These are typically main roads used to travel between cities and towns.
Lane - Narrow street, usually without a shoulder.
Terrace - This is a street that usually has varying elevations or hills.
Way - Typically a Way is a minor street off of a main road.
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