A collection would just be a category of gists in a category like "Idiomatic Python examples", "Django snippets", and so on.
I think people use gists in a fundamentally different way (I do), and I guess you could argue that gists are mainly for viewing and sharing whereas repos are for cloning/downloads.
Think Collections as Pinterest boards for code, perhaps. :)
Gists could be social, whereas repos are more self-serving and utilitarian in the sense of scratching an itch. Or at least they could be.