These days the word drone can be defined as almost anything that flies without carrying a pilot, because these days almost everything in this category has a camera on it, which seems to be what causes the generalization. I would like to help people to understand what different categories there are, and ally the fears that anything in the sky is SPYING ON YOU! Also to try and calm the people who want to go so far as shoot them out of the sky, or legislate them out of existence.
Toys
Firstly, cheap toy quadcopter 'drones' have rubbish quality cameras which means that if you are over 10 meters away they will only be able to recognize that you are a person, over 15 meters away and they will probably not even know if you are wearing clothes! Secondly the range is very short, if you still have control at 100 meters you are lucky, and this is about the maximum range of the video feed from a toy too.
These toys use auto stabilization to return the craft to level when you stop moving the sticks, which is helpful for the complete beginner, but as you get into the hobby it becomes an annoying limitation. These toys are not equipped with GPS and cannot be sent off on missions to distant lands! Even the RTH (Return To Home) function is a joke on these toys, press it and you are likely to see it disappear into the nearest bush!
Aerial Photography
Aerial photography drones, like the DJI Phantom, are what you will see most often in the sky, and the price of these is coming down, which I think is why regulation is getting more strict. These GPS equipped craft in my opinion could rightly be categorized as a hobby drone, as they can be loaded with a flight path consisting of a series of GPS co-ordinates and sent off to autonomously do their thing.
These drones generally do not have zoom lenses and therefore aren't equipped to spy on you from a distance, they do have good quality cameras though so if your wife is sunbathing topless on the roof, if she can hear the craft, then she will probably be nicely visible to the voyeur behind the camera!
Racing and Aerobatics
Racing drones are becoming more and more popular they are also getting smaller and more powerful so you should be aware that if you are spending more than $120 you might well be getting something that is capable of 60Kmh or more. These craft are flown without GPS and with Auto stabilization turned off to get the maximum performance.
I have been trying to introduce 'Flone' as an alternative to Drone for racing and aerobatic craft as they require constant control to stay in the air.