allegory vs. parable

One of the most common mistakes in understanding the Bible is to confuse teaching through parable and teaching through allegory as being the same. Jesus actually used both though he more commonly taught using parables.

The key difference:

• allegory - the similitude is intended to be drawn at many points
• parable - an everyday story told to illustrate one main lesson

examples of each:

• allegory - the Good Shepherd in John 10, the Vine and the Branches in John 15, even the Sower in Mark 4 (Jesus interprets the many points of allegory)
  
• parable - the Good Samaritan in Luke 10 (chiefly intended to illustrate the definition of loving your neighbor, not what the innkeeper represents, who the Samaritan represents)

-thanks to John Stott for good definitions found in Understanding the Bible