Full-Time AWD systems drive both front and rear axles at all times via a center (inter-axle) differential. The torque split of that differential may be fixed or variable depending on the type of center differential. This system can be used on any surface at any speed.
On-Demand AWD systems drive the secondary axle via an active or passive coupling device or "by an independently powered drive system". The standard notes that in some cases the secondary drive system may also provide the primary vehicle propulsion. On-demand systems function primarily with only one powered axle until torque is required by the second axle. At that point either a passive or active coupling sends torque to the secondary axle.