From "How to Write a Technical Paper: Structure and Style of the Epitome of your Research":

The purpose of the related work section is the most misunderstood by young authors. Therefore, it is important
to pay extra attention in writing this section. Similar
to the introduction, the purpose of the related work is
twofold. First, it gives a list of research works that are
related to your paper—necessary to show what has happened in this field. Secondly, it provides a critique of the
approaches in the literature—necessary to establish the
contribution and importance of your paper.
Providing a related work section shows that you have
done your “homework”. In this aspect, it is important
that your related work section be as complete as possible. By complete, it is not meant that you should list all
the existing publications on the subject—this would be
somewhat hard but mostly meaningless; on the contrary,
you should distinguish and describe all the different approaches to the problem. Ideally, a person who chooses to
focus on the area of your paper should only read your paper to “catch up” with the background work in the field.
Moreover, a good background work survey will deter the
possibility that your solution has already been proposed
by others. In time, you will realize that the most important works are found only in journals or in proceedings of
major conferences. Although you have probably studied
publications from other sources, you will end up citing
only the important ones.
Critiquing the major approaches of the background
work will enable you to identify the limitations of the
other works and show that your research picks up where
the others left off. This is a great opportunity to demonstrate how your work is different from the rest; for example, show whether you make different assumptions
and hypotheses, or whether your approach to solving the
problem differs.