No lateral inhibition
Assume that neurons fire when light hits them, and do not fire when there is no light. Edges would appear "fuzzy" because neurons near the edge of the shape's shadow would fire somewhat.
Now, let's look at a system that includes lateral inhibition, a process by which neurons that fire due to light inhibit their neighboring neurons. Neurons in the middle of a light-receiving area will be inhibited slightly by their neighboring neurons, which are also receiving light. However, neurons on a black/white edge fire more intensely than nearby neurons receiving exactly the same amount of light because neurons on this edge are not being inhibited by their nearest neighbors in the dark areas, which is not firing. This allows edges to be seen with greater definition. Look at a black shape against a white piece of paper. Does the white right at the edge of the shape look brighter than the rest of the paper? Well-defined shapes can be detected using complex systems based on this principle of light and dark patterns.