A costume is a set of clothes you wear when you want to dress up like another person. You might wear a witch's costume to go trick-or-treating on Halloween, or put on a George Washington costume to reenact a scene from the American Revolution in a play.
A costume is a set of clothes that is unique to a particular person or time period. If you were starring as Dorothy in your neighborhood production of The Wizard of Oz, your costume would consist of a blue-and-white checkered dress and ruby slippers. On the other hand, if you were starring as Lady Godiva, you wouldn't need much of a costume at all!