According to gender theory, there are three things that go into gender: the sex nature has assigned a person, the cultural understanding of that sex, and one's own mental gender. A male is cis-gendered (as opposed to transgendered) if he has male sexual organs, he fits in to the social roles of being a man, and mentally he is a man.
But what if you have a man's body, but view yourself as a woman? Are you mentally ill or are you transgendered? When my mind does not agree with reality, does it make sense to say that surgery and make-up will force reality to agree with my mind? Is not the very measurement of mental illness: how far the mind disagrees with reality?