A chapter is the main division in a book that separates a time or an episode. These separations are emphatic and shift the story from one place and event to another. Readers often use chapters as a reading break, as chapters end a scene to introduce another. Sometimes, they end a scene with a clincher to keep the reader turning pages. 

A space break takes place on the same page, with just a few inches of space between paragraphs and they are less emphatic. The separation is not essential to merit another chapter. They disconnect a paragraph merely to introduce a transition that does not take place over a long period or does not introduce a new twist of events.

Let’s say that the writer wants to remove a few years in his story. Where significant changes have taken place in the setting and characters, a chapter would be appropriate. This will whet the reader's appetite to see what happens next by reading the next chapter.

Example: These are taking place on the chapter you are currently reading: The Japanese surrendered after the bombs were dropped. Some of the Japanese Imperial Army Officers stationed in the Philippines chose to commit suicide rather than face the disgrace of surrender. The American and Filipino POWs had been released. Private Zachary Amherst was one of the prisoners granted freedom. Skinny, underfed, and suffering from diarrhea, one of his comrades pulls him for a photo souvenir. He stares at the camera pensively as the camera flashes.

If the writer wants to end the chapter after the camera flashed, and wants to cut many years from Private Amhert’s life and proceed to tell his life as an old veteran, he could start the chapter like this:

New Chapter: Private Zachary Amherst stared at his old POW photograph turned sepia by time. He wiped its dusty frame as his eyes filled with tears, his lips quivering. He placed the photograph carefully in a chest along with his other memorabilia. His hands, riddled with liver spots, were shaky.

A chapter break works well for this scene and it helps the writer to economize on unnecessary events. It is emphatic and creates dramatic conflict. If the writer chooses to write another situation after the veteran posed for the photograph, a space break would be more appropriate.

Example: As the camera flashed, Amherst felt sick to his stomach. His comrade asked him what was wrong, but Amherst did not reply as he felt his stomach. His comrade understood and handed him a canteen. “Our suffering is over, comrade. You’ll get home. You’ll get better. Hang in there.”

This space break is sufficient to divide one scene immediately connecting the preceding scene. Chapter breaks will not work if it has cut away huge blocks of time in Private Amherst’s life. However, note that chapter breaks do not only work to cut large amounts of time. It could also be used to introduce a new event that may take place after as short as two or three minutes. 

Example: A cruise ship is about to collide with an iceberg. It would be too late to steer the ship. A crash was inevitable. The passengers panic as they selfishly headed for the lifeboats, squabbling with one another.

If the writer wants a host of characters to tell their own story about the tragedy, the writer may do so in varying points of view using different chapters.