A formal description of the nucleation process with out appeal to any geometrical cluster definition is attempted. This need is avoided by simply specifying the system size and monitoring a global order parameter. Consistent with this assumption, systematic comparison between fluctuation theory and classical thermodynamics leads to the equal-area and equal-height rules for phase coexistence and to a general relation between the surface free energy and fluctuations. An alternative definition for the surface free energy which may be measured by means of a simple thermodynamic integration path arises naturally from the formalism. A proof of the so-called "nucleation theorem'' is given. A general expression for the nucleation barrier is obtained, which when applied to a capillary drop model explains a recently observed scaling law. The nucleation barrier as obtained from simulations is seen to be systematically smaller than that predicted by classical nucleation theory. It is argued that a microscopic phase transition, where the homogeneous phase is transformed into an inhomogeneous phase with no free energy cost, is responsible for this behavior. (C) 2003 American Institute of Physics.