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Gauge refers to the distance between the outer rails. All O track has the same distance between the rails. In general use, O gauge refers to 3 rail model railroading made popular by Lionel. Three rail trains from various manufacturers, such as, Atlas, Lionel, MTH, Weaver, and Williams will operate on the O gauge 3 rail track of any manufacturer.
O Scale refers to trains that run on 2 rail O track. The term O Scale also is used to designate a commitment to scale size reproduction of real life in a scale of 1:48 size, the ratio between the real world and the model. All buildings, people, locomotives, rolling stock, etc., are sized accurately to this proportion 1:48 (1/4 inch equals 1 foot).