Cross-dressing is the wearing of clothes normally worn by the other sex. It works as a noun for the practice — "cross-dressing has a long history in the theatre" — and as a verb, cross-dress: "he cross-dresses at weekends", "she was cross-dressing to travel safely". The reasons behind it vary enormously: acting and comedy (English theatre ran for centuries on men playing women), festivals, disguise, comfort, self-expression, and sometimes sexual pleasure, which is the reason your dictionary singles out. Treat that line as one reason among many rather than the definition; used in the world, the word describes the clothes and says nothing certain about why. The word is plain and neutral in tone — it is what a newspaper or a textbook would use. Keep it apart from two neighbours. Being transgender is about who a person is, not what they put on, so a trans woman in a dress is not cross-dressing. Drag is stage performance, deliberately big and theatrical. Cross-dressing is the wider, quieter, more everyday term that covers a Shakespeare actor, a person at a party, and someone at home on a Tuesday evening, without deciding anything about their identity.