Technically the diminished chord is exactly as you describe, Daisy - a minor chord with a flattened fifth. That is, in effect, two minor thirds put together. The augmented chord is a major chord with the fifth sharpened, but totally irrelevant to this thread!

In common usage the 'other' minor third is often added to a diminished - as in J.S, Bach's famous Toccata in D minor for organ - so both explanations are valid.

Dunno what Sorcha meant, though! Care to elaborate, chuck?!

Diminished chords are rarely used in folk music, probably because chords are chosen to accompany the tune. In 'pop' music, though, the tune is often written to fit a chord progression.

My brain hurts!