The term "transgender" was coined in the 1970s by author and activist Virginia Prince in order to differentiate from the term "transsexual." The difference between "sex" and "gender" is that while "sex" is a biological term meaning whether a person has a penis or a vagina, "gender" is a cultural term that refers to the behaviors and attitudes our society associates with being male or female. While we often assume that a person's gender identity is the same as his or her biological sex, this is not always true.
The word "transgender" was intended to refer to a person whose gender identity does not match his or her biological sex, but who does not want to get sex-reassignment surgery (surgery to remove a person's external sexual organs and construct those of the opposite sex). However, transgender can also be used as an umbrella term for anyone whose gender identity does not completely match his or her gender assignment (based on whether he or she has a penis or a vagina), or as a euphemism for transsexual.
