Turquoise nuggets are small pebbles that have been polished in a tumbler. Most often these are turned into beads by drilling a hole through them. While irregular in shape, these tend to be "roundish," through natural erosion processes. The tumble polish process will also tend to create more spherical nuggets, as well.
The distinction between chips and nuggets can be arbitrary, but "chip" is usually used to refer to small pieces of turquoise that have sharp, angular lines. Chips can be produced by nature, as when a larger turquoise stone fractures, or as a result of the production of other turquoise pieces. Reconstituted turquoise chips are also available on the market.
The phrase "turquoise chip nuggets" is sometimes used to refer to chips that have smoothed corners. This smoothing is due to the effects of tumbler polishing.
When incorporated into jewelry, nuggets and chips can create a casual, carefree look. This is a generalization, of course, as we have seen chips used by professional designers to create truly sophisticated and elegant pieces.
Chips and nuggets tend to be less expensive than precision cut beads and cabochons. Most chips are naturally brittle and thus stabalized.