Classification
There is a sharp dichotomy in Quechua between the varieties of the central Peruvian highlands and the peripheral varieties of Ecuador on the one hand and southern Peru and Bolivia on the other. These are labeled Quechua I (or Quechua B, central) and Quechua II (or Quechua A, peripheral). Within these two groups, there are few sharp boundaries, making them dialect continua. However, there is a secondary division in Quechua II between the grammatically simplified northern varieties of Ecuador, Quechua II-B, known there as Kichwa, and the generally more conservative varieties of the southern highlands, Quechua II-C, which include the old Inca capital of Cuzco. The closeness is at least in part due to the influence of Cuzco Quechua on the Ecuadorean varieties during the Inca Empire, as northern nobles were required to educate their children in Cuzco, maintaining Cuzco as the prestige dialect in the north.
Speakers from different points within any one of these three regions can generally understand each other reasonably well. There are nonetheless significant local-level differences across each. (Wanka Quechua, in particular, has several very distinctive characteristics that make this variety distinctly difficult to understand, even for other Central Quechua speakers.) Speakers from different major regions, meanwhile, particularly Central vs Southern Quechua, are not able to communicate effectively.
The lack of mutual intelligibility is the basic criterion that defines Quechua not as a single language, but as a language family. The complex and progressive nature of how speech varies across the dialect continua makes it nearly impossible to differentiate discrete varieties; Ethnologue lists 44 that they judge require separate literature. As a reference point, the overall degree of diversity across the family is a little less than that of the Romance or Germanic families, and more of the order of Slavic or Arabic. The greatest diversity in within Central Quechua, AKA Quechua I, which is believed to lie close to the homeland of the ancestral Proto-Quechua language.
Read more about this topic: Quechua Languages