Preliminary hearings only occur in felony cases.
The purpose of the preliminary hearing is for the judge to determine whether or not there is probable cause to send a case to Superior Court for trial. Probable cause is usually very simple for the prosecution to prove, because their burden of proof is quite low.
We use the preliminary hearing to flush out the prosecution's case and to lock in their witnesses testimony in preparation for trial.
At the preliminary hearing, the District Attorney may add additional charges and may attempt to remand the defendant back into custody, even if he is currently out on bail.
Indictment by a Grand Jury is an alternative to the preliminary hearing, to be used at the sole discretion of the prosecuting attorney. Grand Juries are often used in Federal Court, and many states also choose to use them for felony hearings. Some states, such as California, rarely use Grand Juries.