Alright. Basically, Hollows happen when you die. Once dead, Your attached to your dead body(I think) Through a "Chain of destiny" Now fast forward to the good stuff. The chain of destiny is gone. You turn into a hollow. A hole forms where the chain connected into your body, This is called the "Hollow hole". You get a nice, Skeletal looking mask, Whose purpose is something along the lines of (Stolen from wikia) Protecting the naked instinct, And in a way giving form to their madness. Hollows come in a wide range of shapes in size, Few resemble eachother, And most that do are clones. They can be anywhere from mammalic, To Reptilian, to outright demonic. Hollows have an insatiable hunger for souls to fill the hole caused by the loss of their heart. (This is why hollow holes are often in the chest, Because the chain usually connects to the heart. I think.)
NOW FOR EVOLUTION!!
Normal Hollow: New born hollow. Not really that strong. Shinigami ish strength.
Menos: A strong hollow. These are formed when a hollows hunger becomes to great for human souls to fill, And they begin eating other hollows. These "Cannibal" Hollows are conglomerations of hundreds of hollow souls, Making them extremely dangerous. Soul society will only send highly training shinigami teams to deal with these. No menos have been seen in the show (I think) So they're no real things to go off of. My own conjecture is that the drastic features of the hollow form get more emphasised.
Menos Grande, Gillian: Menos attract eachother, And engage in a mass feeding, Eating eachother, Resulting in a gillian. Gillian class menos are extremely powerful and large, Dwarfing other hollows by at least the size of a two story building. (So they're 2-3 stories tall.) Menos grande all have the same mask, The same appearance. Menos grande have no personality, Going off of instinct mostly, Which can make them more dangerous than other hollows who have a personality to keep them from doing certain things. Sometimes one of the many hollows a gillian is composed of might take control, The gillian's mask changing to reflect this hollows mask. Only these gillians can become Adjuchas. Equal in power to the seated members of a division probably. (3 might be a little hard, Only the stronger managing to beat one of these.) Gillians have the ability to regenerate extremely quickly, So killing them fast is advised. Usually lose this ability once progressing to adjuchas.
Adjuchas: Unlike Gillians, These hollows are roughly human sized, Though some (Such as Po) could be much bigger. They can vary radically in appearance, From a humanoid shape, To the jaguar like form of Grimmjaw. Extremely powerful, Average ones being able to take on a shinigami lieutenant. (Though Yachiru would probably slaughter 'em.) Adjuchas are much rarer then Gillians, due to the rarity of any one hollow being able to subdue all the other ones in a gillian. Adjuchas must keep eating hollows, Or they will revert back to a gillian, And never be able to become an adjuchas again.
Vasto Lorde: Basically if you see one, Run like a madman. These hollows are incredibly powerful, Stronger than even a captain. Toshiro hitsugaya stated that the ten under aizen's control were enough to destroy all of soul society. Vasto lorde's are almost completly humanoid, With only mask, And other oddities distingushing them. Apart from needing to canaballize more hollows, any other special requirments are unknown.
Arrancar: Arrancar's can be formed from adjuchas and vasto lorde's. Gillian class menos possibly, But this has not been confirmed to the extent of my knowledge. This happens when a hollow removes it's mask. Few hollows have the ability to remove their masks, and even if they manage to do so the change may not be significant. Artificially created arrancar (Transformed by the influence of the Hogyoku) Are much more powerful than other ones, This process unlocking more of their abilities. Arrancar's are completly humonoid, Unless they are incomplete (Such as iceringer and demora may be.) Arrancar have Zanpakuto as shinigami do, But it is not a sentinent thing, But rather their excess hollow powers sealed. By releasing this they assume some of their hollow powers, A sort of hollow form. Some arrancar choose to constantly release theirs, Stating that their human form is weak. All arrancar have mask fragments, A remnant of their mask. Incredibly powerful are arrancar, Since a hollows power is usually doubled or tripled upon transformation.
Well i hope this is considered helpful, Cause i worked hard on it.