What's the difference between "persons" and "people"?

"people" is a collective noun, and it is used to refer to a group of people collectively

These people are a community.

"persons" is the plural form of "person" when you want to refer to a number of people individually.

These persons are part of a community.

Note: The word "people" can also be used as a singular noun and pluralized:

That native people has died out.

The invention was worked on by many peoples from all over the world.

Thus, a list can be made:

Person (A person)
Persons (A group of persons individually)
People (A group of persons as a unit)
OR
People (A specific group of persons)
Peoples (Multiple groups of persons)

The use of the word "persons" nowadays is being shifted towards "People". The word "persons" is seldom heard even though it is often gramatically correct (i.e. Four people died is wrong. Four persons died is correct).

Nobody will punish you for using "people" instead of "persons" in most cases, though.

Source: Yahoo answers