First, theory is related to philosophy, but it is a much narrower term. Philosophy means love of wisdom, and philosophers are people who pursue wisdom through thinking and reasoning. Philosophers are not scientists; they do not ordinarily conduct controlled studies in their pursuit of wisdom. Philosophy encompasses several branches, one of which is epistemology, or the nature of knowledge. Theory relates most closely to this branch of philosophy, because it is a tool used by scientists in their pursuit of knowledge.
Theories do not deal with "oughts" and "shoulds." Therefore, a set of principles about how one should live one's life cannot be a theory. Such principles involve values and are the proper concern of philosophy. Although theories are not free of values, they are built on scientific evidence that has been obtained in a relatively unbiased fashion. Thus, there are no theories on why society should help homeless people or on what constitutes great art.
Philosophy deals with what ought to be or what should be; theory does not. Theory deals with broad sets of if-then statements, but the goodness or badness of the outcomes of these statements is beyond the realm of theory. For example, a theory might tell us that if children are brought up in isolation, completely separated from human contact, then they will not develop human language, exhibit parenting behavior, and so on. But this statement says nothing about the morality of such a method of child rearing.
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