There are many different usages and meanings of the term transvestism.

To Some Trans-genders (or People Who Suffer From Transsexualism As They Like To Term It) Crossdresse
Although the term dressing in womens clothing was a modern invention, it has exactly the same two Latin roots as .....
The term cross-dressing has undergone several changes of meaning since it was coined in the 1910s, and it is still used in a variety of senses.
Hirschfeld operated very much in a three-gender framework: male; female; and other, or third gender. The gay and lesbian rights movement after the Stonewall riots weakened tranvestism's association with homosexuality, since more lesbians and gays became visible and most of them did not show cross-dresser behaviour. I haven't bumped and grinded, and I could become a cross-dresser if I wanted.
That left crossdressing as transvestic fetishism, in which transvestic behavior is coupled with, and often necessary for, sexual arousal.