The current version of Google Drive lets you do all these things from within the app, but Google says it will flip the switch in the next few days, removing the editing features from Google Drive, and instead prompting users to download the standalone apps.
Like the current Google Drive app, the apps let you share a document with a friend or group, and give each person permissions to edit or simply view the document.
When another user makes an edit, you'll be able to see that user typing in real time with a tag near the cursor to call out who is making the edits.
This is a smart move
Even though Google is keeping almost all the same functionality, making standalone apps is a smart move because it's more in line with how most people perceive how office suites should work. Both Microsoft Office for iPad and Apple's iWork apps use their respective cloud services for storage, but leave the heavy lifting for word processing, presentations, and spreadsheets to dedicated apps.
The fact is, it's much more intuitive to open a word processing app when you want to start writing, rather than the confusion of opening a storage app, finding your document, and hitting edit. It also makes sense to only be able to view written documents in the Google Docs app, giving you quick access to your writing without having to sift through the various file types you can save to Google Drive.
With this change, it appears Google wants to step into the familiar app landscape where other companies operate in order to make its office and productivity apps more accessible to people who are used to that landscape.
The Google productivity apps are still in their early stages, but basically mirror the current functionality of what you can do in Google Drive. The big difference is you can now view and edit documents offline, but the layout, buttons, and functionality are almost identical to those of the current Google Drive app.
Google mentioned in its blog that Google Drive will soon lose editing functionality within the app, as the company is instead opening the appropriate standalone app whenever you choose to edit a document (this change will be coming over the next few days). So, if you use Google's productivity suite, you'll need to download the standalone apps to keep up with the changes.
What this change seems to mean, however, is that Google will now be able to work within Apple's and Microsoft's paradigm and hopefully add features to the individual apps that will make them competitive with what those companies have to offer. Currently, Microsoft and Apple offer a lot more in the way of templates and other useful tools within their respective office apps, but don't be surprised if more of that type of easy-access functionality comes to the standalone Google apps in future updates.