One of the primary reasons for the creation of so-called "Fancy Cuts" can be found in the fact that prior to the development of the round brilliant cut, diamond cutters would cut diamonds based on the shape of the raw diamond. While cutters still follow this guideline, the round brilliant cut has brought about more raw diamonds being cut down to the round brilliant as it the most desired shape in the market today.

An experienced cutter could see what type of shapes would best optimize the weight from the raw diamond, and would cut the diamond according to the raw diamond's characteristics. Lighting, be it by natural, candle or gas lighting of later centuries, is also considered by the diamonds cutter.

There are many reasons for fancy cuts, from the practical to the fashionable. Fancy cuts also tend to be broken up into four categories: modified brilliants, step cuts, mixed cuts, and rose cuts.

Modified Brilliants: Modified brilliants are, as the name implies, brilliant cut diamonds with shapes modified from the standard round brilliant. There are numerous shapes that modern technology and cutting mechanics can allow for, including the heart, marquise, trillian and navette. The modified brilliant cut is popular, as it gives the brilliance of the round brilliant cut, but in more unique and personalized shapes. The problem occurs in that modified brilliants are also prone to greater threat of damage, as the irregular shapes resulting from such cuts offer a fragility of form that can easily chip or fracture, and so additional precautions must be taken.

Step Cuts: Also known as trap cut, this cut is characterized by a rectangular or square shape, with the facets of the crown and pavilion running parallel to the girdle, and is one of the oldest forms of cut. The advantage of the step cut is that it preserves more of the weight of the raw diamond than the brilliant cut. One of the most popular examples of the step cut is the emerald cut. The emerald cut has the long faceted planes of the step cut, but has cut corners, which helps to avoid chipping or cleaving of the edges. The culet is not present in step cut stones, but rather they have a keel that extends along the length of the end or bottom of the pavilion. Step cut stones do not have the fire or flash of brilliant cut diamonds, but do exhibit brilliance and scintillation as the light moves clearly between the mirror-like facets. Due to the nature of the long facets, step cut stones must have tremendous clarity, as any flaws can be easily noticed. This means that step cuts have a high luster, and a warm glow. Triangle, obus and kite cuts are also included in the step cut category.

Mixed cuts: The mixed cut is the melding of both brilliant cuts and step cuts. The intended effect is to offer the brilliant finish of the brilliant cut, while preserving the weight retention of the step cuts. This effect is achieved through cutting the facets on the crown (or the part of the diamond above the girdle) in the step cut fashion, with the facets cut long and running parallel to the girdle, and with the facets on the pavilion (or the part of the diamond below the girdle) cut like the brilliant cuts. Mixed cuts are newer in the world of diamond cuts, with the first mixed cuts dating back to as recently as the 1960s. The extremely popular Princess cut is the most well known of the mixed cuts, and has grown popular enough to warrant its own grading system with most gemological laboratories.

Rose cut: These are, like the step cuts, an older cut of diamond. Developed prior to the use of electric lighting, rose cuts fell out of favor in the early 20th century, due to their lack of brilliance. Characterized by a lack of a pavilion, the crown rises from its base, with 12 or 24 triangular facets, reaching up to form a point. They are seeing a renewed rise in popularity as the market for older, antique jewelry makes the use of the rounded rose cut type stones more desirable.