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Not to sound too much like a cranky old man but I would propose that the problem is that we've cheapened the word "diorama" over the past 20-30 years or so in modeling circles. What used to be a very specific type of scene (one that tells a story and/or conveys a purposeful emotional response in the viewer) has become a catch-all term for any model placed on a scenic base with (usually) a figure or two. It takes a special type of artist to pull off the former while the vast majority of the rest of us are content with the latter. What winnows it down even more are the ones who can evoke the emotion but also have the ability to get all the technical fine details right.
I think what you're describing here is the current understanding of the difference between "diorama" and "vignette." But even Sheppard Paine himself allowed the diorama builder to simply show off his models in a landscaped scene without trying to tell a story, so I don't agree that we've "cheapened" the definition of "diorama," but I do think we've refined our appreciation of the scenic elements of the model-maker's art.
I think the current understanding is that a diorama is a "story based" modeled scene, and vignette is a "model-based" scene. The difference between the two is the
INTENT of the model builder.
If the builder intends to convey a story to his viewing audience, then the work is planned and executed as a diorama. The story is an essential part of the total work, and how well (technically and artistically) the builder tells his story is the measure of the diorama.
If the builder only intends to show off the models in the context of history and environment, but has no planned or attempted story to tell, then the work is a vignette. Here the measure of effectiveness is focused on the technical and aesthetic aspects of the model-making.
Of course, the historical and environmental context of the scene is also important with the diorama, but these elements are incidental to the main intent which is for the builder to "tell" his story to the viewer. However, the technical quality of the model-making is also crucial and usually effects how well the diorama builder is able to compose the elements (figures, vehicles - if any- and groundwork).
John's "diodrama" seems to me to be a particular subset of the diorama genre where the descriptive term coined focuses in the kind of story being told, but in all cases, the diorama must tell a story, no matter how "dramatic" that story might or might not be.
However, be it a vignette with no particular story or an epic diorama, the principles, rules and characteristics of good or effective composition apply. Even a vignette with no story to tell must be composed well, and no diorama can tell its story at all without good composition.
A builder can have a great story to tell, and he can even have technical modeling skills of the highest order, but if he fails to apply the common principles, rules and characteristics of composition, then his diorama will not work. Any diorama builder who has to explain his story to the viewer has probably failed in his composition. The diorama should "say" everything that the builder has to "tell" the viewer without the need for any title or written or verbal description. Only effective composition coupled with excellent model-making skills allow this.
It doesn't matter whether the model-builder is composing the 3-D scenic equivalent of a "landscape," a "still life," or an epic action scene, without good composition he will not hold the viewer's attention nor will he be able to lead the viewer around the scene. So, the model-builder not only has to hold his viewer's attention, but he has to "lead" his viewer around his work by using the composition to manipulate the way the viewer looks at the work.
To make all this even more complicated, dioramas and vignettes are composed and constructed in 3-D (boxed dioramas excepted), so whereas the photographer or painter is able to control the viewer's perspective, the model-builder must take into consideration all 360 degrees of possible perspective and 3-dimensions when he composes his work.
If the model-maker can't hold his viewer's attention, then he will not be able to either show off the technical, historical or aesthetic characteristics of his models (vignettes) or "tell" his story (dioramas).
My .02...
