The practical distinction I've found: commands are atomic operations (lint, format, deploy), while skills encode multi-step decision trees ("implement feature X" which might involve reading context, planning, editing multiple files, then validating).

For context window management, skills shine when you need progressive disclosure - load only the metadata initially, then pull in the full instructions when invoked. This matters when you have 20+ capabilities competing for limited context.

That said, the 56% non-invocation rate mentioned elsewhere in this thread suggests the discovery mechanism needs work. Right now "skill as a fancy command" may be the only reliable pattern.