Rather than paraphrase, I will quote Dr. Phil Smith from page 5 of his book, "Tartans for Me!"
"Sept" is a term borrowed from Irish culture in the nineteenth century to explain the use of a variety of surnames by members of a single clan. In Ireland, "sept" is roughly synonymous with the Scottish "clan" and refers to an intra-related family. Where Scots would refer to "MacGregor and his clan" an Irish historian might say "O'Niell and his sept." Only in the case of larger clans with distinct and sometimes widely separated sub-families is the term "sept" appropriate in Scotland. The various branches of Clan Donald, for example, all using the name "MacDonald of ...." or "MacDonell of..." may properly be viewed as septs. The many other names of Clan Donald are just that -- names of Clan Donald.
The variety of surnames within a Scottish clan do not represent separate and definable sub-clans but instead reflect the vagaries of transition of the Gaels into the English naming system as well as marriages, migrations and occupations. The main family itself may have developed a variety of surnames. The preferred modern usage is to avoid the use of the term "sept" and to simply describe these names as they are -- surnames of the family and of allied or dependent families. It is preferable to speak of "The names and families of Clan X" rather than to call a name "a sept of Clan X."
Lauren M. Boyd, FSA Scot
Scottish Information Societyhttp://www.scottishinfo.org