In short: Tube is measured by outside diameter, pipe is measured by inside diameter. There is often confusion as to which size die the customer actually needs - Pipe Size or Tubing Size. Keep in mind that pipe size refers to a nominal - not actual - inside pipe diameter.

Are plumbing pipe diameters internal or external?

As the pipe wall changes, it is the inside diameter that gets smaller. The outside diameter always stays the same. This is the same for metric sizes and for inch/imperial sizes. The metric and inch/imperial sizes are two different systems.

Is PVC pipe diameter internal or external?

PVC Pipe sizes are so named by the measurement of the inside diameter (also called the bore) of the PVC pipe, and not the outside diameter. If you measure the outside diameter it will give you a larger reading than the actual PVC Pipe Size.