Where a person of one gender, dresses up in the clothing of another, for sexual gratification, arousal.
Unlike Transsexuals, Transvestites do not believe that they identify with the opposite gender, than the gender they are assigned, biologically.
This is penchant for wearing clothing, that the opposite sex to them, wears, in which it arouses them sexually.
To be classed as 'Transvestic Fetishism' there are two distinct criteria that has to be met.
One being that one has increasing fantasies, arousal, from the act of wearing the opposite sex clothing, to their gender. These fantasies, are acted out, mostly in private.
It also includes the 'acting out' of being that pretended gender.
The second criteria being that it seriously impacts their lifestyle, outside of their fantasy. In that it intrudes on their normal daily routine, such as work, or social interactions.
The word was originally coined in 1910 by Magnus Hirschfeld, meaning to cross over. Since it's first use, it has undergone many changes, as other words came to mean variations on the original term.
At its origin, it included all who preferred to dress opposite to their biological norms. This included what are now termed as 'transgender' people, those who believe they are a different sex, than their biological appearances would dictate.
To dress in the clothing and under garments of the opposite sex. To become sexually excited by such clothing, is the Fetish part of being a Transvestite.
However, this can simply be based on the feel, of say silk lingerie, or nylon stocking, which can be also about comfort, not just a sexual arousal.
Many Transvestites will have collections, of clothing belonging to the opposite sex, and will dress up in private, take pictures, and have a sexual reaction to such activity. By having other's dress up in opposite sex clothing, can also help them enjoy sexual gratification, while a cross dresser does NOT associate sexual pleasures with such styling.
Practice (Associated Acts): It can also be perceived as a way of hiding their identity, to obtain advancement in one's social standing, work. By pretending to be the opposite gender than they are. The movie, Some Like It Hot, is an example where two men dressed, acted like woman, to escape the Mob. They wouldn't be called Transvestites, nor truly cross dressers, either.
Yentl with Streisand was an accredited film about such a practice, where she desired to be trained in the Jewish Faith, which was only allowed to the males of the religion. So she lived as a man, to attend religious training school, but still identified as being female.
Unlike 'cross dressers' the wearing of such clothing, other than that assigned to their gender, is of a sexual nature. It helps to arouse them, and may not be classed as a fetish, if it does not impact their normal lifestyle.
Some will simply dress up, in their sexual games, to take a part, but in their normal life, they don't consider the clothing of their opposite gender.
Noteworthy: Most 'transvestic fetishists', are not classed as being Homosexual, and supposedly the majority of such persons, are males.
There are no hard and fast statistics, or in depth studies to disprove or support this theory.
Cross Dressers have coined their phrase, because they are simply people who prefer wearing the clothing of others, not for sexual arousal, or because of some inner desire to be that opposite gender.
They simply prefer the feel of wearing that other clothing.
Transsexuals, who may be transitioning from one sex to another, may be required to wear the clothing of their new gender, and act out that role, to assimilate their transition to it. It doesn't make them part of the fetish definition.