Acute leukemia is characterized by the proliferation of immature leukocytes or blast cells that fail to mature, accumulating in the bone marrow comprising over 20% of the cells. Blast cells have nuclei occupying most of their cell volume with visible nucleoli and fine chromatin. Myeloblasts and lymphoblasts can be distinguished based on features like the presence of Auer rods in myeloblasts and coarser chromatin in lymphoblasts.