Final answer:
Cells differentiate and specialize during development because they activate specific genes which dictate their unique structures and functions.
Step-by-step explanation:
As a fertilized egg divides, the cells differentiate and become specialized primarily because they activate specific genes. This phenomenon is akin to how actors in a movie only perform their own parts from the entire script. All cells in an organism contain the same DNA, but specialized cells 'read' only the parts of the genetic code that pertain to their function. This selective gene expression is directed by various transcription factors which bind to DNA, thereby promoting or hindering the transcription of genes. As a result, different types of cells express different sets of genes, dictating their unique structure and functions as seen in the process of cell differentiation and development of organs from the germ layers.