I would like to discuss some gender identity terminology. I have witnessed confusion about what our terms mean. I apologize if this is redundant or conflicts with someone else's view of what all this means; the goal is to facilitate understanding.
Understanding how we see ourselves is the beginning of being able to accept and then respect us. It's very helpful for us to establish this.
First of all, there's our community, the LGBTQQI community. That stands for "lesbian, gay, bisexual, transgender, queer, questioning, and intersex." An alternative I've seen rarely is LGBTQIA: "lesbian, gay, bisexual, transgender, queer, intersex, and ally."
I personally feel that the term "queer" is acceptable and really covers all of us.
"Questioning" refers to someone who's pretty sure they're not mainstream ("mainstream" meaning, in the sense, born a straight, cisgender man or woman) but not sure where they fit in. My former wife Cathy and I, before we both came out as gay and I later came out as transgender, considered ourselves questioning at the very beginning of the gay thing.
"Ally" is a nice term because it includes people who are, strictly speaking, outside our community but are still accepting and supportive.
"Intersex" is something that never used to get talked about. It turns out that genitalia, both internal and external, are also subject to malformation. Doctors previously might not even tell the parents there's a problem. When asked what sex the baby is, the doctor would say, "It's not fully developed; we'll need to run some tests." Then they'd make the child physically female, because it's much easier to create female external genitalia than male. And then they would simply announce that the child is a girl. This is a real problem, because everyone has imprinted in their brain a gender. Our society acts like, and I truly believed most of my life, a person's gender identity is simply the body they have. Clearly, that's not the case, and a small percentage of humans have a gender identity that's discordant with their bodies.
Regarding the term "homosexual," I have found that some gays object to the term. Fair enough. I figure "homosexual" is a medical term and therefore acceptable, but we have the right and privilege to not like it if we choose.
"Gay": Both men and women can be gay, but a gay woman is also a lesbian.
Where the confusion seems to lie is with trans people. The terms "transgender" and "transsexual" probably technically mean about the same thing, but they're used differently. Someone is transgender if they don't identify with the gender that corresponds with their body's birth sex. They don't have to identify with the opposite gender; they could identify with both, neither, or something entirely different. "Transsexual," on the other hand, means that one's gender identity is definitely opposite one's body's sex, so someone can be transgender and not transsexual.
A passage in Kate Bornstein's book Gender Outlaw says it all: "The first question we usually ask new parents is: 'Is it a boy or a girl?' There is a great answer to that one going around: 'We don't know; it hasn't told us yet'" (p. 46).
Another persistent and irritating (to me) source of confusion is the popular assumption that any human dressed like a woman probably considers herself to be female and a "she." There are different reasons that people born in male bodies would present as female. Generally, only male-to-female (MTF) transsexuals truly consider themselves to be female. I have known drag queens, some quite well. They're gay men who still really believe they're men but occasionally dress like women for entertainment. When a gay man is in drag, she's a "she," and she probably has a feminine name for herself, which should be used. Certainly, MTF transsexuals have female gender identity and should be referred to as "she" and their female names used. I have gotten used to the idea that MTF transsexuals in support groups are "she" and "you go, girl," even when they present as men, because they really are women. It took some getting used to, admittedly, but it seems perfectly reasonable now.
Male-identified men in male bodies who occasionally wish to present as female for psychological comfort are called cross dressers. They are then also "she." And, of course, a born female in women's clothes is a "she." So, in the end, any human dressed female is a "she."
Finally, someone whose gender identity is congruent with birth sex can be called many things. I like the terms "born woman" and "born man" because people usually get what I mean, but technically, I was born female too. The most precise terms are "cisgender woman" (or "cis woman") and "cisgender man" (or "cis man"). The prefix "cis-" might be familiar to students of organic chemistry, where it's the opposite of "trans-" and means "the same." I've heard the terms "bio woman" and "bio man" used, but given the research that says that trans women have female brains, I'm biologically a woman too, so it doesn't help much.
The big message is this: We are all real, ordinary people with just a few true differences. We laugh, cry, love, hope, and play just like everyone else.
That's terminology in a nutshell; I hope it's helpful.