This is perhaps the subject of most inquiries of cupcake artisans. My stock answer is the sugar and fat ratio; cupcakes have more of both. Also, in my mind anyway, cupcakes are not as leavened and have a finer crumb as a result of thorough mixing, whereas muffins are quick mixed and have a bigger more crumbly crumb. As for the history of it, well, in my years of disciplined research I have determined that no one really freaking knows.
The invention of baking powder in the 19th century gave way to both muffins and cupcakes. They were both just little cakes. It seems that cupcakes may have started out the same way pound cake did. That is, it was the amount of flour, sugar, fat in the batter – 1 cup. It wasn’t until the “health food craze” of the 60s that muffins became thought of as a healthier cake.
And so it is our generation’s ideas that will determine culinary history, will we let muffins turn into cupcakes?