The most importent part of the definition of a "prep" is where they go to school. "Preps" go to College Prepetory schools; hence the word "prep." These schools are always private, and often (but not always) boarding schools. The best sports teams are generally lacrosse and field hockey, but everyone has alot of school spirit. Therefore, people who do not go to Prep schools, but dress in the stereotypical clothing of preps (Polos, kakais, loafers, etc.) are not preps, but rather they are "preppy." Essentially these people want to seem like they have ties to old money, or are rich, or are blue bloods, etc, etc.
Now the real preps are generally smart, privilaged, and (very often) white. Their parents are usually doctors, lawyers, or buisnessmen, and all went to college. All preps will go to college, often Ivy Legue schools, or small liberal arts colleges in New England (Middlebury, Trinity, Colby, Etc.), though some will go to the elite west coast schools. Preps will generally fill their college resumes with multiple AP classes and will have SAT tutors or courses to assue their entry into these small, elite, and expensive private colleges.
In the end, these real "preps" are the new aristocracy of the United States. They live their lives sheltered from the hardships that the average citizen must deal with, going on about their way in refined luxury. Their lives are set up before they are born, most will go on to similarly professional, affluent, and prestigious careers as their parents, and they will soon give birth to the next generation of preps.
The real preps don't simply dress "preppy." They live it.