The break down uses the extension file identification such as .app, .pages, .jpg, or .pdf. The .app are all the applications or programs you have installed. Photos are determined by the extension jpeg. Audio or Music is mp4 and Movies are mov. Everything else is considered other. That would include documents from Pages or Numbers along with pdf documents. Zip files, disk images, and saved web pages would be included along with your preference files that has a .plist extension. Essentially everything that is not an application, music or movie.
An example: My Time Machine disk lists all the files it has under Other. The main folder has the extension .updb which is used in Time Machine back up data base.