In Standard Leagues, the person who created the league is referred to as the League Creator. As such they are able to create the league, select the base scoring format, choose the draft type/date and invite owners. Their powers are limited to basic league setup.
In LM Leagues the LM has almost complete control over every aspect of the league for much of the season. They are able to select from a wide variety of options to create a unique fantasy football experience. Additionally they have the ability to modify scores, schedules and playoff seeding among other powers.
If an LM in a league wishes to transfer LM powers to another team owner, he may do so in the "LM Tools" tab by clicking "Assign League Manager Powers". A list of all teams within the league will appear with a check box to the right of each one. Click the box next to the team to assign LM powers to and LM powers will be transfered to that team.