Concept:
Translate the given statements into equations and solve simultaneously.
Let:
\[
\text{Smaller number} = x, \quad \text{Larger number} = y
\]
Step 1: Form equations
Difference of squares:
\[
y^2 - x^2 = 180 \quad \cdots (1)
\]
Square of smaller number is 8 times the larger:
\[
x^2 = 8y \quad \cdots (2)
\]
Step 2: Substitute equation (2) into (1)
\[
y^2 - 8y = 180
\]
\[
y^2 - 8y - 180 = 0
\]
Step 3: Solve quadratic
\[
y^2 - 8y - 180 = 0
\]
Factorization:
\[
(y - 18)(y + 10) = 0
\]
\[
y = 18 \quad \text{or} \quad y = -10
\]
Since larger number must be positive:
\[
y = 18
\]
Step 4: Find $x$
Using $x^2 = 8y$:
\[
x^2 = 8 \times 18 = 144
\]
\[
x = 12 \quad (\text{taking positive value})
\]
Final Answer:
\[
\boxed{\text{Smaller number } = 12, \quad \text{ Larger number } = 18}
\]