Teminology associated with the doctrine of precedent
Stare decisis The basic principle that a court is bound to follow decisions in former cases, both those from a court of higher authority and (usually) its own. For England see Practice Note (Judicial Precedent)  3 All ER 77
Ratio decidendi or the ratio. The principle accepted and applied by a court as the necessary grounds for its decision on the case before it. The ratio decidendi is the essence of a judgement which is binding on future cases which are not distinguishable on their facts and which are being heard by a court lower in the hieararchy.
Finding the ratio is a skill which has to be learnt over time : do not rely on the headnote of a reported case.
Obiter dictum or dicta The non-essential, subsidiary principles, statements and reasonings in a judgement. The dicta are not binding, but can have persuasive authority, especially for any inferior courts.
Some statements from the bench on the system in practice
Osborne v Rowlett (1880) 13 ChD 774 at 785
Re Hallett's Estate, Knatchbull v Hallett (1880) 13 ChD 696, CA;
Smith v Harris  3 All ER 960, CA
Lord Denning quoting Sir Frederick Pollock in Close v Steel Co of Wales Ltd  AC 367
Jolley v London Borough of Sutton  3 All ER 409
R (on the application of Kadhim) v Brent London Borough Council Housing Benefit Review Board  QB 955
Some journal articles on topic:
Goodhart, A. L. “The Ratio Decidendi of a Case.” Modern Law Review 22, no. 2 (1959): pp.117–124
Marmor, A. "Should like cases be decided alike?" Legal Theory 1 2005 , pp 27-38
Halsbury's Laws of England at K1 (which OU students can also consult online via LexisLibrary) contains a succinct account of English practice in volume 11, para.91 and following. For more detailed examinations see the books in the box below.
Lewis, T. Ellis. “The History of Judicial Precedent.” Law Quarterly Review 46 (1930): pp.207–224 and 341–360, 47 (1931): 411–427, and 48 (1932): 230–247