To begin, the wheel diameter is the most basic measurement. It's the diameter of the face we see when we look at an alloy wheel fitted to a car. They can range from 12", all the way up to over 24".
The width of a wheel is another simple measurement, it is the width of the wheel, usually measure between the tyre bead. Some cars can only handle reasonably narrow wheels, others can handle very wide wheels.
Wheel offset is where things get complicated, however its actually quite simple. It determines how far towards the center of the car the wheels will sit. It is measured from the center of the wheel to the mounting face of the wheel. It can vary from very low offsets like -20mm, up to high offsets like 50mm.
A low offset means the wheel generally sits further outward (i.e. towards the wheel arch, towards the side you see the wheels from). A high offset means the wheel generally sits towards the center of the car more.
As the offset is directly related to the wheels center, it is affected by the wheels width. As a wheel gets wider, the offset would change if you wanted to ensure the wheel looked the same on the outside.
How we label wheel fitments:
15" x 7" ET38 5x114.3
15" = Wheel Diameter (inches)
7" = Wheel Width (inches)
ET38 = Wheel Offset (millimeters)
5x114.3 = Wheel PCD (bolt pattern)