The term Transgender was coined in the 1970s by Virginia Prince in the USA, as a contrast with the term "transsexual," to refer to someone who does not desire surgical intervention to "change sex," and/or who believes that they fall "between" genders, not identifying fully, or strictly, as either male or female. (Holly. 1991 “The Transgender Alternative.” TV/TS Tapestry Journal 59:31-33). Often in older writings (pre ~1990s), but more rarely today, the term Transgender is used to refer to those who live as the gender not assigned to them at birth, without medical or surgical intervention. In the Netherlands, the term is often applied to this specific group. This group is also sometimes known as "transgenderists" or "non-op transsexual people". (See "Transsexual" below.) More recently, this term has been used to describe anyone who does not strictly adhere to the gender norms of their peers, whether in terms of physiology or choice of fashion. This would include anyone, male or female, who chooses to wear clothing normally worn by the opposite sex.
Transgender identity includes many overlapping sub-categories. These include transsexual; cross-dresser; transvestite; consciously androgynous people; genderqueer; people who live cross-gender; drag kings; and drag queens. Usually not included, because in most cases it involves a paraphilia and is not a specific gender issue, are transvestic fetishists. These terms are explained below. Many people also identify simply as Transgender, although they may fit the definition of any of one of the specific categories. The extent to which intersex people (those with genitalia or other physical sexual characteristics that are not strictly either male or female) are included in the Transgender category is often debated. Not all intersex people disagree with the gender they were assigned at birth. Those who do may self-identify or be identified as Transgender. Although some Transgender people have had medical sex reassignment therapy, also called sex reassignment surgery, others have not, being quite happy living as they are. In other words, not all Transgender people are transsexual, but all transsexual people are Transgender. (See below for criticism.) Given the general confusion over and misuse of the term Transgender, some individuals who move across the gender divide regularly have begun to label themselves as "ambigendered" as they are comfortable with expressing their identity in either gender . The term "transman" refers to female-to-male ("FTM") Transgender people, and "transwoman" refers to male-to-female ("MTF") Transgender people, although some Transgender people identify only slightly with the sex not assigned to them. There is a developing awareness that terms such as "FTM" and "MTF" are subjugating language that reinforces the stereotype of gender as a binary system.  "Genderqueer" is a recent evolution in attempts to signify gendered experiences that do not fit into binary concepts. In the past, it was generally assumed that there were considerably more transwomen than transmen. However, as more research is performed, it seems more likely that the actual ratio is closer to 1:1. 
"Cisgender" is sometimes used to refer to non-transgender persons, and refers to those individuals who identify themselves with the gender associated with their birth sex.
The terms "gender dysphoria" and "gender identity disorder" are used in the psychiatric and medical community to explain these tendencies as a psychological condition and the reaction to its social consequences. Strictly speaking, gender dysphoria and gender identity disorder are considered to be mental illnesses, as recorded in the Diagnostic and Statistical Manual of Mental Disorders (DSM-IV), the standard for mental healthcare professionals. Because of the countless historical recordings of such behavior, however, there is strong debate as to whether they should actually be considered a mental illness at all. Most Transgender people reject the idea, and consider their being Transgender as a simple variation of human behavior rather than a mental illness.  Some have argued in favor of the idea of "gender giftedness." Many mental healthcare providers know little about Transgender life. People seeking help from these professionals often end up educating the professional rather than receiving help. Among those therapists who profess to know about Transgender issues, many believe that transitioning from one sex to another — the standard transsexual model — is the best or only solution. This usually works well for those who are transsexual, but is not the solution for other Transgender people, particularly cross-gender people who do not identify as plainly male or female.
Transsexual people are often people who desire to have, or have achieved, a different physical sex from their original physical sex. One typical (though oversimplified) explanation is of a "woman trapped in a man's body" or vice versa. Many transsexual women state that they were in fact always female gender, despite physically being male; transmen feel exactly the opposite. The process of physical transition for transsexual people usually includes hormone replacement therapy and may also include sexual reassignment surgery (a.k.a. gender reassignment surgery). Having a strong wish for surgery does not have to be present to meet the requirement for the diagnosis, as a number of transwomen do not feel uncomfortable with the male appendage. For transwomen, electrolysis for hair removal is often desired, while many transmen have breast-reduction surgery as early as possible. Some spell the term transexual with one s in order to reduce the association of their identity with psychiatry and medicine. There are some scientific studies suggesting physical causes of transsexuality (see the main transsexual article). Reference to "pre-operative", "post-operative" and "non-operative" transsexuals indicates whether they have had, or are planning to have sex reassignment surgery. This can be misleading, because there are a number of different types of surgery that may be used, and the terms are rarely used with precision. Some suggest that the term "non-op transsexual" is an oxymoron, as many erroneously believe the definition of transsexual should include at least a strong wish for such surgery. However, surgery is usually desired if one has a dysphoric feeling with respect to their appearance, and those having no such dysphoria usually elect not to have surgery. Note that for various medical and financial reasons, people may have the wish, but not the ability, to undergo sex reassignment surgery, however, they are still transsexual. Further confusing the term is that the individuals concerned have various motivations, ranging from dissatisfaction with medical options available (particularly among transmen), to the perception that one's genitals have little bearing upon identity. Currently, there are no broadly agreed terms, even within the larger Transgender community, to accurately define the various groups of "non-op transsexual people". Transgender is sometimes used as a euphemistic synonym for transsexual people. Some prefer this because it avoids the concept of "sex" in "transsexual", which may give the incorrect impression that transsexuality is motivated by erotic desire. However, many transsexual people do not self-identify as "Transgender," contending that the term inaccurately describes and marginalizes their specific gender identity. In addition, many transsexuals identify simply as "men" or "women," though different than that assigned at birth, and do not wish to be associated with the connotation of being in-between genders. Some feel that their gender identity has remained constant, and that they have changed sex, but not gender. Some criticize the use of the term "transsexual" because sex reassignment does not render an individual reproductively viable nor does it change their sex chromosomes. From a functional viewpoint of sex, the transition is cosmetic rather than fundamental, and the individual is not "really" changing their sex. This argument is particularly used by some feminists to dispute transsexual women's claims of identification and association with other women. This ignores, however, cases of non-transsexual people who are infertile or intersexual people who have a non-standard chromosomal configuration. For example, women with Androgen Insensitivity Syndrome (AIS) are born physiologically female, but their sex chromosomes are XY. An analogous condition exists where an XX fetus is exposed to testosterone in utero, and develops male genitalia. In an effort to respect the identity of those transsexual people who do not identify as Transgender, the constructions trans, trans*, or Transgender and transsexual are sometimes used to describe all trans-people. Further, many people whom this article would define as Transgender reject the term altogether, along with other related terms (transsexual, crossgender, etc.). This is most commonly seen with people who have changed sex but who do not define themselves as transsexual. A common statement is that a transsexual is someone who is undergoing a change from one sex to another; someone who has already done so is simply a "man" or a "woman".
Main articles: cross-dressing, transvestism, drag king, drag queen, transvestic fetishism
A person who is cross-dressing is any person who, for any reason, wears any amount of clothing normally considered belonging to the opposite sex. Cross-dressers may have no desire or intention of adopting the behaviors or practices common to the opposite gender, and generally do not wish to undergo medical procedures to facilitate physical changes.
Contrary to common belief, the vast majority of cross-dressers, which comprises most of those who wear clothing normally intended for the opposite sex, are heterosexual.
Drag involves wearing highly exaggerated and outrageous costumes or imitating movie and music stars of the opposite sex (e.g. Rupaul). It is usually defined as a form of performing art practiced by drag queens and drag kings. Drag is generally more theatrical, often comedic and sometimes deliberately grotesque, and this has made it somewhat controversial, with some feminists considering it a caricature of women. Drag is often found in a gay or lesbian context, although it is a common aspect of straight culture as well, with many straight men dressing in drag at Halloween and straight comics like Dame Edna and the Monty Python troupe including drag in their acts. The word "drag" is sometimes more loosely applied to crossdressing in general and Transgender people who are not performers will sometimes refer to themselves as drag queens or drag kings. The term "drag king" can also apply to people from the female-to-male side of the Transgender spectrum who do not see themselves as exclusively male identified, therefore generally covering wider ground than "drag queen". Transvestic fetishism is a narrower term used in the medical community to refer to one who has a fetish for wearing the clothing of the opposite gender. This is considered a derogatory term by some, as it implies a hierarchy of value in which the sexual element of Transgender behavior is of low social value. Many reject the term "transvestite" for this reason, preferring "cross-dresser". It is often difficult to distinguish between fetishism that happens to have female clothing as an object and Transgender behavior that includes sexual play.
This refers to a combination of gender identities and sexual orientations. One example could be a person whose gendered presentation is sometimes perceived as male and sometimes as female but whose gender identity is female, gendered expression is “butch” and sexual orientation is lesbian. It suggests nonconformity or mixing of gendered stereotypes, conjoining both gender and gayness,  "pluralistic challenges to the male/female, woman/man, gay/straight, butch/femme constructions and identities."  Genderqueerness is both unintelligible and abjected in the binary sex/gender system. "[O]ur embodiments and our subjectivities are abjected from social ontology: we cannot fit ourselves into extant categories without denying, eliding, erasing, or otherwise abjecting personally significant aspects of ourselves . . . When we choose to live with and in our dislocatedness, fractured from social ontology, we choose to forgo intelligibility: lost in language and in social life, we become virtually unintelligible, even to ourselves."
An Androgyne is a person who does not fit cleanly into the typical masculine and feminine gender roles of their society. Many Androgyne identify as being mentally "between" male and female, or as entirely genderless. The former may also use the term bigender or "pangender", or ambigender the latter non-gendered or agender. They may experience mental swings between genders, sometimes referred to as being gender fluid. Intergender is also a word that androgynes can use to describe being between or beyond genders. Androgyne used to be primarily used as a synonym for hermaphrodite (a term since replaced by the word intersex), but this usage has fallen out of favor. Androgyny can be either physical or psychological; it does not depend on birth sex. A person who identifies as an androgyne may have been born intersexed, or may have typical sexual organs, either male or female. Occasionally, people who do not actually define themselves as androgynes adapt their physical appearance to look androgynous. This outward androgyny has been used as a fashion statement, and some of the milder forms of it (women wearing men's pants or men wearing two earrings, for example) are not perceived as transgender behavior.
Contrast with "sexual orientation"
(Trans-)gender identity is a fundamentally different concept than that of sexual orientation (compare LGBT, section “Controversy”). Sexual orientations among transgender people vary just as much as they do among cisgender (non-transgender) people. There is, however, for both transgender and cisgendered individuals, an important relationship between their gender identity and sexual identity. Although few studies have been done, some transgender groups report that their members are more likely to be attracted to people of the same gender identity than their cisgendered counterparts. For example, transwomen are more likely than ciswomen to be attracted to other women, and transmen are more likely than cismen to be attracted to other men. Within the transgender community, some attribute this phenomenon to the negative feelings associated with their previous gender. Transgender people who are attracted to others of the same gender can identify as gay, lesbian, bisexual, or pansexual. Thus, a transwoman who is attracted to female-identified individuals would be properly referred to as a lesbian, and a transman who is attracted to male-identified individuals would be correctly referred to as a homosexual male. In turn, trans people who are attracted to people of a gender identity opposite their own would be considered heterosexual. In professional literature, the terms "homosexual" and "heterosexual" are often used for transgender people incorrectly based on their birth sex, instead of their gender identity. Transgender people may feel misunderstood by caregivers because of this practice. It is also quite confusing when a relationship that is considered gay or lesbian by both partners is re-labeled heterosexual, or a relationship that consists, as far as the partners are concerned, of a man and a women is re-labeled homosexual. Compare Homosexuality and transgender. Many Western societies have some sort of procedure whereby an individual can change their name, and sometimes their legal gender, to reflect their gender identity (see Legal aspects of transsexualism). Medical procedures for transgender people are also available in most Western and many non-Western countries. However, because gender roles are an important part of many cultures, those engaged in strong challenges to the prevalence of these roles, such as many transgender people, often face considerable prejudice. Some people, more often politicians than medical professionals, have claimed that being transgender is merely "a choice and a lifestyle" (for example U.S. Rep. John Culberson, R-Texas); in this context, it is usually seen as an extreme form of homosexuality.
Transgender Individuals in non-Western cultures:
This article primarily describes Western modes of transgenderism, but many other cultures have or have had similar phenomena: The so-called berdache in many Native American groups is recognized as a separate gender, a woman-living-man, not as a man who wants to be a woman. The term "berdache" is a misnomer, however, as no Native American group actually used the term; different ethnic groups had different names for the role, such as the winkte. The spouse of such a person is not viewed as being gender-different themself, but as a normal male. In some societies there is a corresponding gender for women living as males.
In Thai culture, there is the kathoey, who is very similar to the English definition of transgender, but is sometimes broader, including effeminate gay males.
South Asian cultures have hijra, who can be born intersex, or (more commonly), are assigned a male sex at birth and later choose to live as a third sex, surgically removing their male genitals and wearing women's clothes. See, for example, the Peoples’ Union for Civil Liberties, Karnataka (PUCL-K). (2003). Human Rights Violations against the Transgender Community: A Study of Kothi and Hijra Sex Workers in Bangalore, India. 
Chinese cultures have a wide variety of transgender modes of existence. See transgender in China.
In Iran, Ayatollah Khomeini instituted state procedures to help pay for sex-change operations in those who identified as transgender. See Transsexuality in Iran.
Mukhannathun are gender-variant (typically male-to-female) persons of the Islamic faith who are "accepted within the boundaries of Makkah and Madinah (Islam)".
Muxe are a third gender (physically male) in Zapotec culture.
The ancient Galli were castrated followers of the Phrygian goddess Cybele, who can be regarded as transgender in today's terms.