Pucp,

The plug gage has male threads with flats milled across the threads. You thread the gage into your hole by hand until it stops and the location of the milled flat relative to the outer face of your part acts as an indicator for thread size.
Do a google search for these and you will get the general idea. I couldn't find specific instructions for use from home.
A quick and dirty test is to use a known "good" male fitting and thread in by hand. You should get approx. 3 turns.

If you (or your inspection department) desire more detail on gages and gaging (including tapered pipe threads) take a look at MIL-STD-120 (http://131.82.253.19/docimages/0000/52/99/35513.PD2).  It's a big file/download, but there's a lot of good information there...

Keep in mind that there are different types of NPT gauges that gauge different characteristics of the thread.  The NPT L1 plug checks for hand tight engagement and will not check the thread taper.  In order to check the taper one must also purchase either a NPT L3 plug which checks wrench tight engagement or a NPT 6 step plain taper plug gauge. Be aware that the L1 gauge will gauge acceptable with an incorrect taper.

Northern Gauge Sherwood Park Ab

Every industry has different terminology but essentially the plug gauge is as Mandrake22 describes. The flat on an will match up with the first thread in your box +/- one thread. The taper gauge is used if you are using a tapered reamer prior to threading. its a plain tapered plug with a couple of lines to measure the high and low diameter of the reamed taper. Gauge manufacturers: Hemco & Lonestar are two manufacturers I can think of.