When playwright and director Young Jean Lee developed her all-female, all-nude performance piece "Untitled Feminist Show," she was in the midst of "a dream come true," she said. For more than a year, she was an artist in residence at the Park Avenue Armory.

Playwright Young Jean Lee was an artist in residence for more than a year at the Park Avenue Armory. Getty Images

A residency like the Armory's can be life-changing for an artist. With unlimited access to studio space and total creative freedom, even the wildest idea can be attempted. But the term "residency" has become a catchall that goes far beyond ivory-tower experiments. Last month, pop star Britney Spears launched her residency at Planet Hollywood in Las Vegas, where for the next two years she'll perform her new show.

Though both "Britney: Piece of Me" and "Untitled Feminist Show" are products of residencies, there is a vast gulf between the types of residencies that produced them (let alone the content). Performance residencies are about entertaining the ticket-buying public, be it with a pop star or chamber music. Artist-in-residence programs seek to nurture the creative process.

"It almost should not be the same word," said Adam Huttler, executive director of the artists service organization Fractured Atlas. "Agreeing to be on stage for a certain number of days, how is that different from a booking?"

Caitlin Strokosch, executive director of the Alliance of Artists Communities, which works to professionalize residencies, draws a line between "artist-centered versus other-centered" programs. "The main distinction is the primary focus on the development of new work," she said.

Billy Joel's series of concerts at Madison Square Garden this year was called a residency. WireImage

Inflating a long-term stage gig into a "residency" adds panache, but the term does have practical implications, says Kurt Melien, vice president of entertainment for Caesars Entertainment, which is presenting Ms. Spears. "It has a lot to do with the exclusive nature of it," he said. "A resident is exclusive to a certain place."

Mr. Melien pinpoints the Las Vegas use of the term to Celine Dion's 2003 show "A New Day" at the Colosseum at Caesars Palace, which ushered in a new era of performers in the city. The word, he says, is used "colloquially in the entertainment business, but now it has been embraced by the public."

Billy Joel's new series of monthly performances at Madison Square Garden has been called a residency in a number of publications, from the New York Post to Rolling Stone, even though the venue calls it a "music franchise."

There is precedent for the concept in New York: Bobby Short reigned for decades at the Café Carlyle, which continues the tradition of hosting a regular performer.

By contrast, creative residencies exist to encourage artistic exploration. The results may not be remotely commercially viable, but they give artists the freedom to risk and fail—or create a risky hit.

In many cases, the work that emerges benefits more parties than just the individual artist. The Studio Museum in Harlem, which hosts three artists every year, tends to buy work produced by resident artists, as a way of building its collection. Plays nurtured at the Lark Play Development Center, which has several fellowships and residencies, have made it to Broadway, such as Katori Hall's "The Mountaintop."

But there are plenty of residencies that invite artists to do absolutely nothing. At Yaddo in Saratoga Springs, N.Y., the mission is to provide uninterrupted time and space. "You are not asked to account for that time," said President Elaina Richardson. "You're not being given time for a specific project."

Britney Spears arrives at Planet Hollywood in December. WireImage

Residency programs like Yaddo's are designed as a retreat: Artists live at the facility while they are working. And by providing housing, such programs are in fact similar to Vegas residencies at major properties. According to Mr. Melien, Ms. Spears chose to live at the Planet Hollywood hotel when she is in town. "The allure of the residency for a lot of artists is that they can settle down in one place," he said. "They don't have to tour."

Housing isn't standard, however. The Park Avenue Armory and the Studio Museum in Harlem, like many institutions, provide mainly workspace. For New York artists, that can be the far greater need than living space.

Regardless of housing or performance expectations, one common theme is that the relationship between host and artist furthers an aesthetic identity on both sides. In the case of the Studio Museum in Harlem, artists acquire valuable recognition (often early or midway into a career) while the museum builds its collection and strengthens an association with a rising star that it helped create.

"The residency is a two-way street," said John Clinton Eisner, artistic director of the Lark Play Development Center. "It has to do with why you go into a community—to learn, grow, share."

Skeptics could question how much Ms. Spears or Mr. Joel are learning or growing, but Mr. Eisner points out that even stars need new challenges. "It's difficult to keep growing and thinking about how you can be more useful to the world," he said. "Sometimes it's more difficult for people who have achieved success."

Ms. Richardson, of Yaddo, says there's no harm in expanding the language, especially if it means more support for individual artists. "A menu of options is good for the culture because we can meet the demand," she said. "The need is only getting higher."

Write to Pia Catton at pia.catton@wsj.com