Just like race, gender is a social construct and not a biological fact. Just because you were born with particular sexual organs doesn’t mean you will automatically act or live a certain lifestyle, although for much of human history this has been the imposed social norm. Understanding that gender is much more fluid and socially constructed–a gender spectrum is a common term–allows us to break out of the masculine-feminine binary and embrace a much richer and more complex landscape of gender identities. A few examples of different gender identities might include: transgendered, third gender, cisgendered, two-spirited, queer, calabai, calalai, hijra and gender non-conforming as just a few examples.
You can find a little more about some of these concepts and an introduction to gender issues at the Gender Spectrum website.