I believe the direct v. indirect distinction originally comes from grilling. There, its essentially a question of do you put the food directly over the heat source (burning charcoal, gas burner, wood longs, etc.) or do you put it on the other side of the grill. Putting it directly over concentrates most of the heat on the bottom side of the food; putting it on the other side allows the heat to distribute to all sides of the food. Naturally, since its spread out, its also cooler.
So, you can then generalize that the following are more like direct heat:
- Sitting on the coals in a foil pouch. (Or on the wood, whatever fuel).
- Under a broiler, gas or electric
- Held with tongs over a burner on a stove (e.g., a pepper)
- In a sauté or fry pan, with only a little oil
The heat-contact side may be being hit by heat upwards of 1000°F in some methods.
And some examples of things more like indirect:
- Baked in an oven.
- In a smoker (what's called BBQ in the American South)
- Boiling, steaming, braising.
You also get some things that are harder to classify, like if you deep fry something its being cooked evenly all around, but at a heat delivery rate more similar to direct heat. And some odd things like a slice of bread in a toaster (mostly like direct heat, but with two heat sources).
Direct heat is used to cook thin cuts of meat (thin steak); indirect to cook large cuts (roast). Sometimes both are used; you may use indirect heat to cook a thick steak or roast through, but direct heat to sear the outside.