There is no general consensus about the differences in interpretation between the transits, progressions and directions, although the most common theory is that the transits refer to circumstances from the outer world while the progressions and directions represent psychological landmarks of the inner evolution.
There are some astrologers who affirm that the transits, progressions and directions, they all indicate both events and psychological changes, and there isn't a set of criteria to distinguish between these techniques, the situation is judged on an individual basis.
Robert Hand, a reputed astrologer, author of considers that some people react to transits, progressions and directions on a emotional and psychological level, while there are others who experience these astrological influence primarily on the exterior level, as events, depending on the degree of awareness of the dynamics of life of the individual.
Ronald Davison suggests in his book "The Technique of Prediction" that the same way that progressions are derived by substituting one day for each year of person's life, a transit can be regarded as a progression based upon one day for each day of life. This notion makes it clear that there is no real distinction between the two techniques, rather they are two forms of the same idea.
Further reading: Robert Hand - Planets in Transit