From #openttdcoop wiki
This page describes the hierarchy of line types that make up the rail nework in a standard coop game. There should never be any ambiguity at all about which sort of line a given stretch of track is a part.
The hierarchy is three levels. The highest level is the Mainline. Mainlines make up the heavy trunk routes, and all train journeys will traverse one at some point. The intermediate level is the Sideline. Sidelines connect the mainlines to the branch lines. The lowest level is the Branch Line. These are the lines which run to resource stations.
There is only one other type of line - a Principle Station line. These are like very heavy sidelines, and connect the principle stations directly to a mainline.
Mainlines run around the map . The provide the backbone of the network, and are fast, straight, obstruction free lines. If necessary, entire cities are sacrificed in their construction. They are connected to zero or more mainlines by Backbone Hubs, and zero or more sidelines by Sideline Hubs. They can be left unterminated. Mainlines should be named and numbered.
Sidelines are connected to exactly one Mainline, no more, no less. They are connected to zero or more Branch lines. They are not connected to stations, and they are not terminated by anything - they simply end, ready to be extended in future if necessary. Sidelines should be numbered, and occasionally named.
Branch lines are connected to exactly one Sideline, no more, no less. They are connected to exactly one station, no more, no less. A branch line's purpose is as a dedicated line connecting a station to its Sideline. If further stations are built, they must be connected to the Sideline by their own dedicated branch line.
Principal Station line
Principle Station lines are the major exception to the strict hierarchy, and are used where there is a single station used as the single drop-off for a given resource, or a single station used as the single pickup for a secondary cargo. These commonly include power stations, factories, food processing plants, sawmills, paper mills and so forth. They are Principle Stations. In general there is only one Princilpe Station handling a given cargo in the game, and it may be expected to handle several hundred trains. The Principle Station line is an extremely high bandwidth line connecting the Mainline directly to that station. They should be extremely well signposted.