Difference Between Light, Medium and Heavy Machine Gun

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As we all know, a ‘Machine Gun’, is an advancement of an otherwise automatic weapon, in terms of a rapid spray of several rounds, and quick changing of large magazines. I hope our understanding is all close to this. Now we need to know the differentiation, and therefore the origin of nomenclature and eventually a ‘best-description’.

Initial machine guns did not have rifling.They had short barrels. Were capable of firing large number of rounds, small enough to carry, and was mostly originated from the Gatling Gun, circa 1960s, which itself could be considered a machine gun.
Noteworthy: C.E. Barnes of Lowell, MA, patented the machine gun in 1865!

Around 1880, we had the real automatics which could fire continuously while the trigger is depressed. These were the origins of the machine gun, although there is more story to tell.

Machine guns themselves were much needed only during times of war, and that’s when R&D to develop the early variants of what we see and know today, came in place. Now, the reason for machine guns to be used was to stop more enemies in a faster method. Logic being that instead of taking a few seconds and missing a moving enemy, it was better to burst several rounds in those few seconds and increase chances of hitting the enemy. While this was mostly true for the Gatling and its types , the typical section hierarchy and description of the army unit of 10 soldiers, included an ‘LMG Soldier. Sometimes two. This was typical in most wars fought where enemies would shoot out of a trench, and hence called ‘Trench Warfare’. Given a time-motion study on this, trench warfare mandated soldiers to quickly carry a gun which could spray several rounds, in circumstances where they do NOT have time to aim, etc. The machine gun fit well in, given that it was small enough to be carried easily by one person, could easily shoot multiple rounds in a short span of time, and could easily be loaded. If we looked at this from an advantage perspective, given what was available then, it seems most reasonable for a section of 10 soldiers to have about 2 LMG men, who could quickly attach trenches under cover of the remaining soldiers (and their Winchesters and Lee Enfields), to surprise the enemy with a couple of grenades and several bursts of a 9mm hot lead.

And as these handy blokes became a part of combat, it was natural to effectively relate their performance to greater dimensions, including helping those in trenches. This meant that the trenched soldiers needs machine guns to spray oncoming and attacking soldiers as fast as possible. And the non-rifled, rather light ones probably did not help much. They needed ones which could shoot farther with more accuracy and since they were stationary, they could therefore use heavier guns. Lo and behold, a bigger version with longer accurate barrels and huge magazines or chained ammo started evolving. Maybe they were too big to be carried by one man. Maybe they needed a stand (bipod, tripod, Stallone or Arnold) to hold the big monsters. 
The next step, obviously was to see if these could be ported on to vehicles (both land and air), with probably even more heavier rounds. And all these, which only a time machine can confirm, seems like how they all evolved, in a rather very fast time span, given rapid wars in succession.

Machine guns, in various types, sizes and power were now being designed for several uses. You had one that could be carried easily, was very low end. There were also rifled costlier ones which could cause more destruction. Big and Bigger ones existed for use on field, jeep, tank, plane, etc. While some used belt fed ammo, others had huge magazines. 
Every variation highlighted atleast one certain ‘must have’ aspect. In the sense that a particular need was always ensured in the variant, depending on its application. For example, the very heavy caliber more powerful combat aircraft machine guns could deploy very high power, to even eat thru metal, lower powered ones made a great impact on field in jeeps, or from tranches, where man-stopping was priority. Situations where the gunner was not at time-liberty to change magazines, meant large supply of ammo thru clips or belt. Those who were always on the move needed lighter ones, with easily changeable magazines.

Although some timelines and variants of machine guns that other have mentioned in their answers, could be tagged against the above, the real need for description starts to take shape.

I come from 20 years of Mobile Experience, and as I know it, most discoveries have nomenclatures attached after they were invented. The term ‘smart phone’ came much after the iPhone emerged, and so on. Now if someone asked me what a smartphone was, the best relative description a decade back was the iPhone. But today, the description has changed since iPhone and their counterparts have changed too!
I have applied this thought frame to other discoveries, like automobiles and computers and so on, and it seems remarkably true that the naming convention comes only after a variety has been introduced, and after it has caused some confusion, and after a need for nomenclature and categorization emerges with good need.

And in this sense, the categorization of LMG, MMG and HMG could relate to some or all of the following.

  1. The weight of the machine gun.
  2. The number of people needed to carry or operate it.
  3. The situation of operation - fixed, moving on person, moving on vehicle, etc.
  4. The destruction capacity of the machine gun, in terms of range, stopping power, muzzle energy, etc.
  5. What circumstances warranted the use of these guns. - Attack, Defend, Both, Surprise, Snipe, Close combat, Guerrilla, Rough Terrain, Forest Terrain, etc.
  6. Combination required - multiple types of targets and uses

.. and so on.

Now, based on this, the several types of machine guns, although they were not essentially made to fit a particular category, could still be divided into the following. (Based on the several answers and other web related information, most of the machine guns would suit one of these categories, while some may aptly belong (as stated in other answers) to more than one category):
LMG - would be apt for machine guns that are light, can be operated by one person, can carry a minimum but good number of rounds, can be easily reloaded and so on. 

MMG - would stand for something more than an LMG, which meant it is not ‘supposed’ to be as mobile as an LMG, but could still be shifted and used on maybe a jeep, or used stationary for rapid action deployment; and being heavier than LMGs, they are more powerful with larger capacity rounds for longer range ...
HMG - tends toward the top of the line when awesome firepower from very high calibers is needed, and will thus warrant proper stands, mostly not meant to be displaced from where it has been deployed, definitely not human-carried, but can be human operated, far greater effective range, and so on.

So overall, more than agreeing on what gun is of which type (w.r.t. Machine guns, LMG, MMG & HMG), I would be most pragmatic to place available guns in these categories for our own better understanding, instead of trying to fit in a best description to the terms itself.

Endpoint- Although this answer does not completely answer or define the needs of the question, the very related thoughts described will surely make us understand machine guns and their types based on practicality, usage and their qualities.

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