How does a nebula specifically relate to a general interstellar cloud?

Every nebula is an interstellar cloud, but not every sparse patch is a nebula.

The relationship between these terms highlights differences in density and observable properties. An interstellar cloud is a broad descriptor for any collection of gas and dust located in the space between stars within a galaxy. A nebula is a specific subtype of interstellar cloud that possesses sufficient density or optical activity—meaning it emits, reflects, or blocks light distinctly—to be visibly observed as a defined object. Very diffuse, sparse regions of interstellar gas, even though they are technically interstellar clouds, do not warrant the classification of 'nebula' unless they exhibit this necessary optical interaction with light.