Google’s Ian Hickson, who is the editor of HTML5 at the WHATWG group, has announced an “Update on the relationship between the WHATWG HTML living standard and the W3C HTML5 specification” in a message that seems to express frustration at the slow pace of the W3C standards body.
There have long been two versions of HTML5, one managed by WHATWG, and the other by the W3C. When the W3C embraced HTML5 in 2007 it used the WHATWG work as its starting point. However, rather than folding its work into the W3C, the WHATWG continued to develop a separate specification of its own.
Hickson now says:
More recently, the goals of the W3C and the WHATWG on the HTML front have diverged a bit as well. The WHATWG effort is focused on developing the canonical description of HTML and related technologies, meaning fixing bugs as we find them , adding new features as they become necessary and viable, and generally tracking implementations. The W3C effort, meanwhile, is now focused on creating a snapshot developed according to the venerable W3C process. This led to the chairs of the W3C HTML working group and myself deciding to split the work into two, with a different person responsible for editing the W3C HTML5, canvas, and microdata specifications than is editing the WHATWG specification (me).
A practical consequence of the split is that there will no longer be a single bugtracking system for bugs that apply to both the WHATWG and W3C specifications. These will now be managed independently.
The changes described above are unrelated to the change announced in April regarding the WHATWG’s adoption of the W3C Community Group mechanism, but together they mean we are now independent of the W3C HTML Working Group again, while still maintaining a working relationship with the W3C.  My hope is that the net effect of all this will be that work on the HTML Living Standard will accelerate again, resuming the pace it had before we started working with the W3C working group.
The outcome appears to be greater divergence between the two standards, with new specifications drawn up by WHATWG that may not be adopted for a long time, or may never be adopted, by the W3C. There is increasing risk of incompatibility as well, though Hickson says there will still be a “working relationship”.
One of the browser vendors most affected is Microsoft, which supports the W3C but is not a member of WHATWG.