How do scientists divide earth's history?

Geological time is broken down into Eons (very long term units), Eras (medium term) and Periods (shorter) units. There is also a fourth unit called Epocs that are even shorter time periods, but used mostly by specialists.

The boundaries between various units was initially determined by breaks in the fossil record. For example, the end of the Palaeozoic was when trilobites died out. End of the Mesozoic when the dinosaurs died out and so on.

With the discovery of radiometric dating, these boundaries could be determined more precisely and finer subdivisions, like Epocs, were possible.

More recently, from about 1970 onwards, there was growing evidence that many/most of these boundaries coincided with mass extinction events that killed off huge amounts of species.

Geologist are thinking of adding a new Epoc called the "Anthropocene" to reflect a time when us humans have had such a profound impact on the planet (mostly for the bad!). But to do this, would require a clear boundary in the geological record so that future geologist could recognize it - one option under consideration would be the radioactive fallout layer that occurs around the world from above ground atomic bomb testing in the 50's and 60's. This layer will be around for 10's of thousands of years or longer.