The simplest form of length gauge consists of two half-circles of wood, one fixed, one sliding, with a mark every half inch to indicate a belt length in inches. That measures the circumference of the belt around the inside. This is not the length that is preferred by belt manufacturers, but it is the easiest way to measure it. The difference inside measurement makes compared with the (recommended) outside measurement is fairly small. I agree that it should not be called inside diameter, it is inside circumference. If you want to read up on the subject, here is the story according to one of the world's largest V belt manufacturers:
http://www.gates.com/facts/documents/Gf000204.pdf
