Nucleation and growth of 123 from the melt via a peritectic reaction into domains of aligned platelets is studied. Analysis of the microstructure of well-formed domains indicates that there is no orientation difference between adjacent platelets within a domain, suggesting that a domain grows from a single nucleus. The platelet boundaries are found to be filled-in with secondary phases that correspond to the liquid phase at high temperature, suggesting that constitutional supercooling effects may be operative. Samples quenched from temperatures considerably below the peritectic temperature contain only a few crystals, indicating the presence of a large nucleation barrier. The above observations, coupled with extensive microstructural examination of quenched solid-liquid interfaces, suggest that the 211 size, distribution and volume fraction not only control the growth rate of 123 along the fast growth ab-plane (by supply of yttrium), but also the growth rate along the slow growth c-direction since the nucleation barrier is reduced at 211/123 intersections. At high cooling rates there is a distinct change in the nucleation and growth processes. Structures characteristic of sympathetic or autonucleation and spherulitic growth are observed. These structures are distinct from the single crystal nature of well-formed domains. The growth mechanism which results in the formation of 123 domains and the final microstructure within a single domain, also explains the observed non-weak-link characteristics for current flow along the a, b- and c-directions, as determined by direct transport and magnetization measurements.