How is it decide which road is what?

A road has no special qualifiers. It connects point a to point b.

A street connects buildings together, usually in a city, usually east to west, opposite of avenue. street is generally within a town or a city that is dotted with homes or buildings on either side. Also, roads with heavy traffic are called streets.

An avenue is traditionally a straight road with a line of trees or shrubs running along each side, which emphasize arrival at a landscape or architectural feature.

A boulevard is a street with trees down the middle or on both sides

A lane is a narrow street usually lacking a median.

A drive is a private, winding road, drive shortened form of driveway, not a driveway itself, usually in a neighborhood, connects several houses, A drive is a small road that leads to a private house as in the case of a driveway. Unlike a long straight street, a drive is not as straight and is meandering. Moreover, quieter places, where there is very light traffic, are named drives. Drives are roads that are used for short stretches and exist to take one to private properties. Drives are usually not named as they already are recognizable as leading to a house with a number.

alley a narrow path or road between buildings, sometimes connects streets, not always driveable

A way is a small out of the way road

a court usually ends in a cul de sac or similar little loop

a plaza or square is usually a wide open space, but in modern definitons, one of the above probably fits better for a plaza as a road.

a terrace is a raised flat area around a building. When used for a road it probably better fits one of the above.

crescent is a windy s like shape, or just a crescent shape, for the record, above definition of bay was also given to me for crescent

a highway is a major public road, usually connecting multiple cities

a parkway is a major public road, usually decorated, sometimes part of a highway, has traffic lights.

a causeway combines roads and bridges, usually to cross a body of water

circuit and speedway are used interchangeably, usually refers to a racing course, practically probably something above.

parade wider than average road historically used as a parade ground.

terrace more common in uk, a row of houses.

References:
http://mentalfloss.com/article/30020/whats-difference-between-street-and-road
https://answers.yahoo.com/question/index?qid=20080313012537AApMO2Z
https://www.reddit.com/r/explainlikeimfive/comments/2me7l2/eli5_whats_the_difference_between_an_ave_rd_st_ln/
http://www.differencebetween.com/difference-between-street-and-vs-drive/