There are a great number of ways to measure a group, not all of them are right, but there are a GREAT number of "right ways" to do it.

Personally, I think you want to know the distance between the centers of the holes, since inside to inside or outside to outside would be affected by bullet diameter, i.e. if I shoot a 5" group center to center with a .22lr vs. a 5" C-C group with a .45-70, my outside to outside or inside to inside measurements will be a quarter inch off, when the actual center of mass of the bullet hit at the exact same spot.

How I do it: For 3shot groups, construct a triangle from center to center of each hole, then measure from the outside of one to the inside of another (gives you the length from center to center), then divide by two, Mark the middle of the line, and draw a line from the middle of your triangle sides to the center of the hole opposite that side. Do that for all three sides and you'll have the "center of mass" for all of your shots, basically the geometric center of your group.

Measure all lengths from the center of the triangle to the center of each hole, then average them. That is what I call my group size, and my longest length is my "widest shot".

It's easier to show you how this is done than to tell you, but I think that's clear, and it's a very accurate way of doing it. It takes a lot of time, so unless you really need to know the EXACT size of your group, this is kind of arduous.