The great chain of being or scala naturæ is a classical and western medieval conception of the order of the universe, whose chief characteristic is a strict hierarchical system.
The chain of being is composed of a great number of hierarchical links, from the most basic and foundational elements up through the very highest perfection, in other words, God, or the Prime Mover.
God, and beneath him the angels, both existing wholly in spirit form, sit at the top of the chain. Earthly flesh is fallible and ever-changing: mutable. Spirit, however, is unchanging and permanent. This sense of permanence is crucial to understanding this conception of reality. One does not abandon one's place in the chain; it is not only unthinkable, but generally impossible. The hierarchy is a chain and not a ladder. (One exception might be in the realm of alchemy, where alchemists attempted to transmute base elements, such as lead, into higher elements, either silver, or more often, gold—the highest element.)
In the natural order, earth (rock) is at the bottom of the chain; these elements possess only the attribute of existence. Moving on up the chain, each succeeding link contains the positive attributes of the previous link, and adds (at least) one other. Rocks, as above, possess only existence; the next link up, plants, possess life and existence. Beasts add not only motion, but appetite as well.
Man is a special instance in this conception. He is both mortal flesh, as those below him, and also spirit. In this dichotomy, the struggle between flesh and spirit becomes a moral one. The way of the spirit is higher, more noble; it brings one closer to God. The desires of the flesh drag one down. The Christian fall of Lucifer is especially terrible, because that angel is wholly spirit, who yet defies God, the ultimate perfection.

Other subdivisions

Arthur Lovejoy: The Great Chain of Being: A Study of the History of an Idea, (1936) ISBN 0-674-36153-9
E. M. W. Tillyard: The Elizabethan World Picture (1942)
William F. Bynum, "The Great Chain of Being after Forty Years: An Appraisal", History of Science 13 (1975): 1-28