Pitch diameter is a term used to take measurements of the diameter of a gear or a screw using pitch points. Pitch points on a gear could be found if a straight line were drawn up from two of the gear's teeth located side by side and the two lines were connected by a curve. In the case of a gear or sprocket, pitch basically measures the distance between teeth. In the case of a screw, the pitch is shown by a straight line through the tread of the screw. Tread is the term for the spirals along the end of a screw that allow it to be inserted into a piece of wood and hold the screw in place.
In a screw, this measurement, which is often called the thread pitch diameter, falls in between the measurement of the tread's major and minor diameter. The major diameter is the measurement of the tread at its largest point — if a circle ran around the outside of the screw and skimmed along the outer edges of the tread, this would mark the major diameter. The minor diameter is also the measure of an imaginary circle, but this circle runs around the inner part of the tread where it stops turning and becomes the solid cylinder of the screw.
Gears, on the other hand, do not measure pitch diameter in the same way, though the concepts are similar. A gear (and a sproket) have both a pitch and an outer diameter. The outer diameter is the distance across an imaginary circle that goes around the outside of the gear. If a piece of string were placed around the gear along the top of the teeth and didn't dip into the gaps between teeth, this would be the outer diameter.
The pitch diameter, sometimes called the pitch circle diameter, for both gears and sprockets is measured as if a circle ran around the gear and passed through approximately the center of each tooth instead of across the top. To find the measurement more precisely, someone can imagine a circle in between each tooth on the gear that fills the gap and is roughly in line with the top of the gear's tooth. Measuring from the center of one of these circles to the center of the circle directly across from it is the pitch circle diameter.