IKEA Germany advertises with a catchy slogan:
Wohnst du noch, oder lebst du schon?
Are you still living, or are you already living?
This works in German since wohnen ≠ leben. But the difference is significant. Here's how to tell the difference between wohnen and leben and which one to use when.
"wohnen" is used for short-term situations.
"Ich wohne bei meinen Eltern" ...because I'm at home for the summer.
"Ich wohne bei einer Freundin" ...because I'm waiting for my new apartment to open up next week.
"Ich wohne in Berlin" ....because I'm only here for one semester.
"leben" is used for long-term situations and situations for which your intention is long-term.
"Ich lebe jetzt in Trier" ...because I moved here and intend to stay here for a long time.
"Ich lebe bei meinen Eltern" ...because they are old and I am taking care of them.
"Ich lebe seit Jahren mit meinem Lebensgefährte." ...and since we are Lebengefährten, we are planning on staying together.
A few German learning books instruct this concept differently, as in "wohnen" is the apartment or house in which you live and "leben" is the city/country you live in, thus it's a matter of scale. Some German speakers also differentiate between having a home somewhere, but the majority of your life taking place somewhere else, as in wohnen determining where you sleep (in einem Dorf in der Nähe von Kassel) and leben being where you work/go out/participate in life (in Kassel).