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Gender identity is the experience of one's own gender, regardless of physical characteristics (sex), intentional appearance and behavior (gender expression), or sexual orientation. Most people identify as the gender that they were assigned at birth, which is called being cisgender. Transgender people don't identify as the genders they were assigned at birth.
All societies and cultures have certain categories that people use to express their gender. In the western culture (i.e. Europe, America, Australia...) these categories are typically male and female (Binarism). There are, however, other societies that have more than two recognized gender identities.