The Mac OS groups the physical memory (RAM) into four different categories : Wired, Active, Inactive, and Free.
Wired memory pool is the one that is allocated and used by the OS itself and is not shared with other apps, so other applications can't borrow from the wired memory pool.
Active memory is amount of memory that is currently in use by the running applications.Each application allocates, consume and hold on to it own memory allocation. As an app needs more it allocated from the Free memory which then is termed as Active memory
Inactive memory is memory that has recently
been used by an application that is no longer running. When we launch the application, the application would allocate memory from the Free pool and that becomes the Active memory. So when we close the application, the OS would release some of the Active Memory held by the App to back to Free pool and some back to Inactive Pool. By pushing some back to Inactive Pool allows the OS to start the same app quickly if the user launches it again, thus reducing the time to start. In the absence of sufficient free
memory, inactive memory will be reclaimed by another running application
that needs memory.
Free memory is amount of physical memory that is free to use. Any new or existing application can grab and hold on to free memory as they require, in that case the free memory become active memory. Once the Inactive memory is cleaned up, it become free memory.
Normally the wired memory ranges between 150-300MB and the free memory range would depend on the total memory of the machine. Some times you experience slowness or lag in switching windows or opening application that would indicate the system running low on Free memory. The memory allocations can be checked using the Activity Monitor Tool, the Top Command, other tools like iStatPro etc.
The OS would try to reclaim Inactive Memory and make it Free periodically as required. However the developers can run the purge command to do so if needed and certainly that helps at times.