A favela is fundamentally different from a slum or tenement, primarily in terms of its origin and location. While slum quarters in other Latin American countries generally form when poorer residents from the countryside come to larger cities in search of work, and while this also occurs to some extent with favelas, the latter are unique in that they were chiefly created as large populations became displaced. Many favelas now have electricity, which 20 years ago was un-heard of. Favelas differ from ghettos such as those in the US in that they are racially mixed, even though blacks make up the majority of the population - that is, in Brazil it is chiefly economic forces, rather than ethnic or cultural issues, that drive people there.
Shanty towns are units of irregular self-constructed housing that are typically unlicensed and occupied illegally. They are usually on lands belonging to third parties, and are most often located on the urban periphery. Shanty town residences are built randomly, although ad hoc networks of stairways, sidewalks, and simple tracks allow passage through them. Most favelas are inaccessible by vehicle, due to their narrow and irregular streets and walkways and often steep inclines.
These areas of irregular and poor-quality housing are often crowded onto hillsides, and as a result, these areas suffer from frequent landslides during heavy rain. In recent decades, favelas have been troubled by drug-related crime and gang warfare. There are often common social codes in some favelas which forbid residents from engaging in criminal activity inside their own favela.
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In short favelas are illegal settlements, often by "nortestinos" (people from the North of Brazil) that come to the city hoping for a new and better life. I visited one of the favelas in the outskirts of São Paulo with some friends from my faculty that are doing a project there. The first photo is from a central square where some of the more engaged settlers imagine "encontros femeninos", or activities more directed to smaller children and women, as the favela already has a brilliant football field for the men and accordingly a bar for the men to drink beer and watch a match.
Many favelas have piracy electricity. Weather this is the case in this favelas I cannot tell, the wiring is certainly interesting as it leads a life of it self like a drunken spider webbing unconsciously.
Television is a very important part of a Brazilians life, and I'm told an inhabitant of a favela will buy a set before buying a cooler for the food of the family. All the windows of the houses were opened and allowed the sounds of soap operas, popular music and religious programs fill the streets. Most Paulistanos are unfamiliar to the value of silence, for me somewhat hard to accept at times. In this case it made me relax, having heard favelas are very dangerous. Only the foreigners in our group had dared to bring cameras. The Brazilian middle and upper class have a lot of preconceptions and are dramatic and overreact as often as possible.
A bar gathers people on the square when the sun is setting and everyone gets back from work. People in the favelas often have to travel with public transport for hours back and fourth every day, since their jobs are often in the centre of town. The favelas themselves have little commerce and offer few job opportunities.
This favela is lucky to have a group of activists that constantly lobby at the municipality to get projects financed. I find it quite amazing that the municipality has financed a football field at a illegal settlement. São Paulo has many empty buildings in the centre of town that could offer housing for the people that are forced to occupy other-mans-land, but these buildings are on private hands, and the state have nowhere else to house the favelaers if it were to reclaim the land. 
The main square with the little bar at the end and the flood lights from the football field behind it.
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