INSIDE THE LEATHER
Inside the Leather is the measurement used to determine if a putt is a "gimmie." It refers to the distance from the bottom of the grip down to the clubhead of the putter. To measure, place the putter clubhead inside the cup on the green. Lay the putter flat on the putting surface, extending back toward the ball. If the ball is between the cup and the bottom of the grip (i.e., if the ball lies next to the shaft part of the putter), the putt is said to be "inside the leather" and, therefore, within the gimmie distance.
The fact that the term "inside the leather" is used to determine if a putt is a gimmie or not leads to some usage issues between the two words. They are basically interchangeable even thought one is a characteristic of the other.