If you are sitting in a crowd of people watching actors on a stage, you're probably in a theater. If the performance is projected on a large screen, you're in a movie theater.
The Greek word for theater (theatron) comes from the verb theasthai, meaning “behold.” You are likely to behold a play or a film inside a theater. If you've dedicated your life to theater, you are probably an actor, director or playwright. Remember when you yelled “fire!” in a crowded theater and got arrested? That wasn't funny.