There is substantial debate over whether or not the English Toy Terrier is a distinct breed or is simply a variety of Manchester Terrier. Regardless it did develop from and is closely related to the larger Manchester Terrier and shares the majority of it's early history with that breed. For more information please see the history section of the Manchester Terrier article.
The English Toy Terrier is nearly identical to the Toy Manchester Terrier. This breed does tend to be somewhat smaller, and standards call for an ideal weight of 6-8 pounds. At one point many of these dogs were as small as 2 pounds, but such animals are very unhealthy. The other primary difference is that English Toy Terriers tend to have slightly wider ears, but this is as much as aspirational goal of breeders than an actual difference. As more and more Toy Manchester Terrier blood enters English Toy Terrier lines, any differences other than size will likely disappear.