In terms of clothing, the difference between a fad and a fashion is the time component. A fad is short-lived, while a fashion endures. Fads are characterized by extreme enthusiasm for something that is shared by a large number of people over a relatively brief period of time. Fashions are also characterized by their popularity by groups of people but with more consistent enthusiasm over longer stretches of time.
There is an air of novelty to fads. Once they are no longer new and original, they tend to lose popular appeal. Fads have definite starts and finishes. In a very general sense, fads tend to be more extreme than fashions. It is often precisely because they are extreme that they do not endure and evolve into long-term fashions, according to PBS.
Fashion refers to more conventional groupings of clothing. Fashion is more broadly distinctive, classic and tends to cover a longer duration of time. Fashion can also refer to a larger industry, which is based on garments designed for particular tastes.
Popular media tends to greatly influence both fads and fashions. Celebrities and pop culture figures often instigate fads.
An example of a clothing fad is fluorescent colors or patch pockets. An example of fashion is classic style or Bohemian style.