The following is an excerpt from The Star Wars Timeline Gold compiled by Nathan Butler. He did such a good job of explaining this, I figured why reinvent the wheel...
SECTION IV
LEVELS OF OFFICIALITYSo let’s check some of the big questions . . . Emperor Palpatine had a son with three eyes. Or did he? Han and Leia were married one year after the Battle of Endor. Or was it four? The Nagai invaded known space in a terrible war. Or did they? These questions and their answers pose some of the most confusing conundrums in Star Wars media. The reason for the contradictions and confusion is simple: profit from licensing. The solution? Well . . . there is one. Unfortunately, it’s not very well known, since labeling things automatically as apocryphal and such would be bad for sales. But it does exist. So, just what is this magical ladder of "how real things are?" Grab a snickers. You’re not going anywhere for a while. From the horse’s mouth, thanks to a contact who wishes to remain anonymous, here’s the lowdown.
Okay, first of all, you need to recognize just what the situation is for stories like Star Wars that appear in several different media.
When sagas are made that are in various media, but have begun with a film or a television series, things can get complicated. They become even more complicated when people other than the creators of the films or series get involved in making other stories in books, comics, video games, etc. Confusion arises as to what is really a part of the overall story and what is not. This means that the items have to be divided up and rules must be applied for what is "real." Things like Star Wars, which have such an incredible amount of material available, must be especially picky, and tend to use specific names for specific "levels" of how "real" things are.
Sometimes, the creators have enough control over spin-off products that the distinction is easy. Take Babylon 5, for instance. The B5 creator, J. Michael Straczynski, kept enough control over the items allowed to bear the Babylon 5 name, that he has decided that all of the comics and all of the novels are just as "real" or "official" as any episodes of the Babylon 5 television series. He simply declared that any inconsistencies in the stories are to be written-off as being mistakes from the standpoint of history.
Other times, the creators sell off their rights to their series, like in the case of Stargate, and you end up with a "real" storyline by the people authorized to continue the story, such as Stargate SG-1, and the materials sanctioned by the original creators (who no longer own the rights to the story), such as the Stargate novels by McCay, which become Apocryphal even though they were authorized by the original creators and form a coherent storyline on their own.
Needless to say, this can get very, very confusing.
In the case of Star Wars, though, George Lucas has never taken a major active hand in any of the licensed Star Wars novels, comics, and so on, except in the case of the major spoiler of Vector Prime, which he personally ordered (I won’t give it away for those who’ve been living under a rock). Instead, he has only taken control of his actual films, and even then he has deemed several video productions he had a hand in (to an extent), Droids, Ewoks, and the two Ewok films, to not be a part of his vision, and thus not a part of his timeline.
So, the situation in 1977 was that the only Star Wars item on the field was the Star Wars motion picture, which would be re-released later as Star Wars: Episode IV--"A New Hope." As time went on, though, the popularity of the saga grew incredibly. The public kept asking for more and more Star Wars stories. Lucas decided to let his company, Lucasfilm Ltd., allow items to be created under its license. These were not meant to be part of the "story according to Lucas" or even to all tie-in together. They were simply for the public to get another helping of Star Wars adventure.
By the time 1991 came around, there were already a lot of Star Wars items on the market, to say the least. It was at this point that Lucasfilm called into being a new plan. The plan was to allow for an actual official continuation of the Star Wars saga, at least from the company's point of view (not Lucas' own point of view). This plan spawned the Bantam/Del Rey/Berkely/Dark Horse/etc. set of interconnected stories that were dubbed the Official Continuity. As time went on, certain items that were not a part of this Official Continuity were "pulled in" by Lucasfilm, even as late as things like the Marvel Comics series being made definitively Official in 2001. The same went for old Star Wars comic strips, reprinted into Officiality as Classic Star Wars. Other items, such as the old Han Solo Adventures and Lando Calrissian Adventures were also deemed Official, to make the Official Continuity more rich.
In 1997, Lucas released the Star Wars Trilogy: Special Edition, which included revised versions of A New Hope, The Empire Strikes Back, and Return of the Jedi. When this happened, Lucas deemed the Special Editions to be his definitive vision, pushing the original versions down immediately below the SE's when it comes to officiality.
Then, after the release of The Phantom Menace in 1999, Lucas revised the film with two previously deleted scenes for the special DVD release in 2001, bumping the original film down just like the Special Editions had done to the original trilogy in 1997.
Well, with all of these things being added and subtracted and otherwise jumbled around, people had no clue what was or was not a part of the "real" Star Wars saga. It was during the release of all of these different stories and such that Lucasfilm created its continuity department and began drawing lines as to what goes where.
The conclusion was to divide Star Wars stories (both licensed and unlicensed) into categories:
The main thing to remember as you look at this classification system is that if lower levels contradict higher levels, the higher levels "win." Contradictions between items in the same level are considered mistakes on the authors' parts or mistakes on the parts of whatever historian is telling us this story from "a long time ago."
Canon is what is definitely part of the saga. Much like how in religion, Canon is the religion's major holy text, you can look at this as the "sacred" part of Star Wars. This is the stuff that supercedes all else, and only Lucas (or Lucasfilm in the case of anything in 3rd or 4th Level Canon) can deem parts of it untrue. This level is divided into four sub-levels.
The first of these sub-levels, the level that nothing can contradict, is known as 1st Level Canon. The only things this includes are:
The second of these sub-levels is 2nd Level Canon. This level includes the scripts to the Special Editions and TPM, along with the original release versions of TPM, ANH, ESB, ROTJ. This level is overpowered by 1st Level Canon only. Thus, since in the Special Edition of ANH, Greedo shoots first, but in the original version, he does not, the 1st Level Canon item, the Special Edition, "wins." Greedo shot first. In the case of TPM, the podrace does last longer than in the original version.
The third of these sub-levels is 3rd Level Canon. This level includes the scripts to the original versions of ANH, ESB, and ROTJ, along with the novelizations of the TPM, ANH, ESB, and ROTJ films. (For those wondering why the ANH novelization is not 1st Level Canon, since it credits George Lucas himself as author: Lucas didn't write it. It was ghost-written by Alan Dean Foster.) This level can only be overpowered by 1st and 2nd Level Canon. Thus even though the ESB novelization says Yoda is blue, he is still green, because that is what 1st and 2nd Level Canon tell us. (Some items of the novelizations have been ordered out of existence by Lucasfilm. Hobbie's death in the ESB novelization, for instance, has been deemed "apocrypha" (and written off as just him getting badly injured), allowing Stackpole to use the character in later novels. Their reasoning for doing this was because in 1st and 2nd Level Canon, Hobbie isn't seen dying, nor does Veers' AT-AT get run into by a snowspeeder.
Moving back to the sub-levels of Canon, the fourth of the sub-levels is 4th Level Canon. This level includes the radio dramatizations of ANH, ESB, and ROTJ. This level can only be overpowered by 1st, 2nd, or 3rd Level Canon. So, just about any of the dialogue in the radio dramas is overpowered already, except for the items that we never see in any other version of the story.
(Just as a little digression here: It is rumored that when A New Hope, The Empire Strikes Back, and Return of the Jedi are released on DVD, they will be in an even more advanced form than the Special Editions. This new format is rumored to be known as the Trilogy Archive Restoration and would end up taking the 1st Level Canon reins and essentially bump the current 1st to 2nd, 2nd to 3rd, 3rd to 4th, and 4th into a new 5th level of Canon. More on this as it develops.)
Now, before I go on, it is important to note that the specific names for these levels are often not used, or they are used in different ways. In Steve Sansweet’s Star Wars Encyclopedia, for instance, the term Canon is used to cover the four levels mentioned above, while the next level down, instead of being referred to as "Official" is referred to as "Quasi-Canon." This is just a difference in nomenclature, not in meaning. The same goes for the common usage in Star Wars magazines, like Gamer, where the phrase "Canon" is used to refer to both Canon and Official materials. This is in line with the idea of "Canon" and "Quasi-Canon" being a broadly defined "Canon." In any event, however we go about naming these levels, it is the structure of the levels and what they mean that is of utmost importance, not what we choose to call those levels. We could just as easily give each level a letter, A, B, C, D, and so on, yet the levels would mean the same thing, only be named differently. Moving on…
The next level "down" after 4th Level Canon is known as Official. It is very important to understand that Canon and Official are not the same thing when it comes to Star Wars. In some sagas, like Babylon 5, they are, but in Star Wars, they are not. This level includes anything created for the "official continuation" of the Star Wars saga. It generally falls under the Bantam/Berkley/Dark Horse/LucasArts/etc. contract. Some items are reprinted or "ordered" into the Official Continuity by Lucasfilm, and thus are also Official. There are also some items produced by these companies that are deemed Apocryphal (not Official) by Lucasfilm as well. For instance, the Classic Star Wars: Devilworlds comics, while printed by Dark Horse, are not Official. When it comes to video games, a lot of weeding-out has taken place, so that as of this writing, the only Official video games out there are Shadows of the Empire (if beaten on Jedi difficulty), Dark Forces (when beaten), Jedi Knight: Dark Forces II (beaten as a Light Side Jedi), Mysteries of the Sith (when beaten), Battle for Naboo (when beaten), and Starfighter (when beaten). All other video games are not Official. This level can be overpowered by any of the four sections of Canon. You also need to understand that if you look at Lucas’ vision of Star Wars, NONE of the Official Continuity takes place or even exists. So, for those of you who ask time and again about Thrawn appearing in the Prequels, the reason you won't see him is that the character is non-Canonical (merely Official). There is a huge difference.
Before we step beyond the Official Continuity into the realm of the various alternate timelines for the Star Wars universe, it is appropriate to take this moment to comment on what I refer to as "Lucasfilm decrees." Sometimes, when there are contradictions between Canon and Official, or Official and Official, Lucasfilm steps in and issues a decision that resolves or explains away the conflict. There are three examples of this that I think illustrate this well.
In essence, I suppose the message of these examples is not to give up in the face of continuity glitches and contradictions in the Star Wars materials. If it’s Official or above, chances are that LFL has already dealt with the problem and ironed out the glitches, at least by decree, if not in writing.
Back to the officiality ladder, the next level "down" after Official is known as Apocrypha. This level includes everything that is licensed by Lucasfilm, but does not fall into Canon or Official. This includes all kinds of items, from Rebel Assault to the Trioculus Saga to scratch-and-sniff books, along with many new materials being produced with the "Infinities" insignia. There are a few very important things to remember about this level.
You can find these Apocryphal Timelines in the Apocrypha Supplement.
The final level "down" is Fan Fiction (or FanFic). This is the name for all of the materials created by Star Wars fans, but not licensed by Lucasfilm. If you've ever written a Star Wars story, it was FanFic. Since these stories and their timelines are not sanctioned by Lucasfilm, their creators have great choice in what materials they choose to include. Just remember that nothing here has any bearing on the Star Wars materials at large. It is purely fan-made, for-fun stuff. Examples would include Troops, Star Wars: Episode III.V and the Scourge of the Nevoota Bee trilogy.
You can find these Apocryphal Timelines in the Fan Fiction Supplement.
So, you see, there are rules governing what is and is not "real" in Star Wars. It just depends on what level you are talking about. For most people, "real" Star Wars is the Official Continuity. For Lucas, it is 1st Level Canon. As Obi-Wan Kenobi might say, it all depends greatly on our own point of view. Whatever our preferences are, though, it does not change the facts of what is and is not a part of each level of officiality. As much as I might like to see items like Empire's End dropped from the Official Continuity, it shall remain. As much as some would like to see Rebel Assault II made Official, it is being kept Apocryphal in its own timeline with Rebel Assault. That’s just how it is.
Put simply, these are the rules, and it is not up to us to question them, only understand them.
(If you think this is bad, just be thankful we’re not discussing Highlander. Out of four movies and three television series, they’ve deemed two movies and one full television series apocryphal. Compared to that LFL’s continuity ideas are quite lenient.)
P.S. A special audio clip with an alternative way to visualize the Levels of Officiality can be found at the SWT-G’s website, www.starwarz.com/timeline.