The distinguishing feature was the arrangement of the cylinders. Usually there were 7 cylinders, and they were arranged radially about a central crankshaft. See also [Radial engine]?. In the case of a rotary engine, the crankshaft was fixed solidly to the aircraft frame, and the cylinders spun round, attached to the propeller. This was supposed to have two benefits:
By about 1920 it was obvious that both of these arguments are bogus.
Rotary engines had some disadvantages too. The need to have 7 cylinders (each in a seperate cylinder block) moving at high speed made for extra complexity and weight to hold it all together. This is not good in an aircraft engine.
Perhaps more seriously, having such a large weight spinning in an aircraft produces significant gyroscopic? effects. Maneuvering an aircraft with this kind of engine required a lot of skill since it didn't always respond to controls as expected. It is said that the [Sopwith Camel]?, powered by a rotary engine required full left rudder to turn left, and full left rudder to turn right, but neutral rudder to fly straight ahead.
For all these reasons, rotary engines of this kind became rare as aircraft engines after about 1920. They were never very popular for other uses.