Type I
This is the type of chip (or shaving) that is formed when the wood splits ahead of the cutting edge, then rides up along the front of the cutting tool until the bending force breaks the chip. It is the type of chip that is typical of bench planes with bed angles of 50° or 55°. Such a chip gives a smooth surface when cutting with the grain (or exactly parallel to the grain, as shown in Photo 1), but it gives a rough surface when cutting against the grain (as shown in Photo 2), because the chip repeatedly breaks below the intended cutline.

Type II
With this type of chip, the wood fails in a plane (extending from the cutting edge to the work surface) that roughly bisects the angle between the bevel (or rake face) and the direction of travel (as shown in Photo 3). This is the type of shaving that you could expect from a scraping plane or other tools with a high cutting angle.

If you take light cuts, such a high cutting angle allows you to work difficult grains with virtually no tear-out.

  Photo 1: A Type I chip produces a smooth surface when cutting parallel to the grain.
  Photo 2: When cutting against the grain, the same chip produces a rough surface.
— excerpt from The Complete Guide
to Sharpening by Leonard Lee
  Photo 3.