Many people assume that one who enjoys Japanese anime and manga is automatically labeled as an 'Otaku'. This is completely untrue. Cosplay and the love of anime and manga does not make you an otaku.
An otaku is simply one who over-obsesses a certain hobby, in most cases anime and manga. Typically, this is a negative thing to be called in Japan, although North Americans have begun to take a liking to the word.
American person one: Steve knows everything about Love Hina. He's such an otaku.
American person two: Yeah, he'd be so glad to hear that.
Japanese person one: That Tsutomu Miyazaki sure was an otaku.
Japanese person two: Yeah, what a psycho.