Scale

Scale refers to the fraction of full-size that an item is. For instance, something that is 1/220 scale (sometimes written 1:220) is 1/220th the size of the real thing. Something an inch long at 1/220 scale is really 220 inches (over 18 feet) long in reality.

To give you a feel for the various scales used in model railroading, here is a list of common scales, their scale fraction (according to Central Hobbies), and the scale height of a 6-foot (72-inch) tall person:

Scale Fraction       Person (inches, approximate)

G     1/32 to 1/20.5 2-1/4 to 3-1/2

O     1/48           1-1/2

S     1/64           1-1/8

HO    1/87           7/8

N     1/160          1/2

Z     1/220          5/16

An N scale person who is "6-feet" tall would correspond to someone a little over 8-feet tall on a Z scale layout.

Apparently G scale is not as well standardized as other scales.

Gauge

Gauge refers to the distance between tracks. It is commonly used for real trains, and commonly misused for model trains. Model trains are sometimes referred to as N gauge or Z gauge when they should be referred to as N scale or Z scale, etc.