Placing the term mustang into the class of horses sets the term apart from everything in the universe that isn't classified as horse. But because there are many different types of horses, an extended definition will provide the distinguishing characteristics that will tell us the difference between an Arabian, a Clydesdale, a pinto, and so forth. One of the best aids to understanding definition is a section in Hayakawa's Language in Thought and Action on what he calls the abstraction ladder. To a farmer, one of his cows, named Bessie, can be seen as simply Bessie, but can also be seen as one of the many animals he owns known as cows. And cows can be considered as livestock, farm assets, and finally as wealth.
Livestock includes whatever animals the farmer owns.
For purposes of definition, then, we want to assign the term to be defined in lower-level classes not the upper ones. The process of identifying distinguishing or defining characteristics is necessary in order to separate one thing from another within a class. Classes, in other words, have subgroups that are formed, just like the class as a whole, on the basis of similar characteristics. Take, for another example, the class of musical instruments. Essential characteristics are those that must be present to make the thing what it is and not something else.