What nominal really means, and why pipe sizes lie
A two inch pipe is not two inches anywhere. Nominal sizing is a historical artefact that every trade has quietly agreed to keep.
Nominal means in name only. A nominal size is a label used to group compatible parts, not a measurement you can take with a rule. It is one of the most common sources of confusion for anyone moving between trades, because in ordinary speech a size is a size.
Pipe is the classic case. The nominal size once referred roughly to the internal bore, back when wall thicknesses were relatively consistent. As stronger materials allowed thinner walls for the same pressure, the outside diameter had to stay fixed so that existing fittings and threads still worked. The bore changed, the label did not.
The rule that actually holds
For a given nominal size, the outside diameter is constant and the wall thickness varies by schedule. A heavier schedule eats into the bore rather than growing the pipe. That is why a fitting will thread onto both a light and a heavy pipe of the same nominal size, while the flow capacity of the two is noticeably different.
It is not just pipe
The same convention runs through timber, where a finished board is smaller than its nominal call size, and through fasteners, where thread designations describe a system rather than a measurable diameter. In each case the label survived because too much tooling and too many documents depended on it.
The practical habit is simple. When a size matters for fit, measure it. When a size is being used to order a part or match a fitting, use the nominal designation and do not correct it, because the label is the part number in everything but name.