There is a short article on the Costume Designers Guild website entitled "The Relationship Between Costume and Fashion Design".
There is some pontification and then they provide three high level film costume designers opinions on the matter. Here are a few quotes:
"I believe a Costume Designer's job is to visually tell the story, without the costume becoming the story... while in fashion, the costume is the story." -Michael Dennison
"Voraciously pouring over uploaded personal snapshots and research books, Larlarb informs her design with details from real life. She considers costume design more than providing wardrobe, she believes it 'actually fleshes out the character's behavior.'"
"The Oxford English Dictionary defines costume as "A set of clothes in a style typical of a particular country or historical period," while fashion is described as "A popular trend, especially in styles of dress and ornament or manners of behavior." To put it another way, fashion reflects the current vogue in clothing, and costume uses clothing to evoke a personality to support a plot. For the most part, the purposes of the two mediums differ; fashion is motivated by commerce, while costumes are designed for an actor in a specific role, not for public consumption."