After some extensive research on this topic, I am satisfied with the explanation provided from www.gotquestions.org:
Question: "Should Christian women wear pants?"
Answer: The question about women and the wearing of pants or slacks is an issue that is raised about externals based in legalism when the life of the child of God should be about a spiritual relationship based upon our in Christ position as believers. The obedience of a child of God is not measured by what clothing they wear but by their walk in the Spirit (Galatians 5:16).
When looking at what we call "doubtful things" we need to use Scripture in context to arrive at principles to help us to walk as believers, which means we consider the dispensation and the whole counsel of God and not take passages out of context. There is a passage in the Old Testament that seems to speak about a woman wearing men's clothing. "The woman shall not wear that which pertaineth unto a man, neither shall a man put on a woman's garment: for all that do so are abomination unto the LORD thy God" (Deuteronomy 22:5, KJV). The context of this passage is the second giving of the law to the nation of Israel as they are poised to enter into the Promised Land. Deuteronomy 22:5 is an admonition not to live as a transvestite. This has to do with more than just the clothes that a person is wearing, but speaks to living a life that emulated in every way a sex that was opposite than the one that the person was born in. Transvestitism was a practice of the Canaanites, and Israel was to consider it an abomination. Can we take a principle from this and apply it to our lives as believers? Yes. However, when we do so, we must use it in the context in which it is given and do so in relation to the dispensation of grace.
The Apostle Paul wrote extensively on the difference between the law and grace in Romans. We are not justified by our adherence to the law but we are justified by faith in Christ, (Romans 3:21-28). The Apostle concludes this passage of Scripture by saying, "Therefore we conclude that a man is justified by faith without the deeds of the law" (Romans 3:28, KJV). The believer is Christ Jesus is "dead" to the constraints of the law. "But now we are delivered from the law, that being dead wherein we were held; that we should serve in newness of spirit, and not in the oldness of the letter" (Romans 7:6 King James Version). Therefore, a believer does not live by legalism, nor by license, but rather by grace.
What has that to do with a believing woman wearing pants? There is no Biblical LAW saying what a woman should wear or not wear. Rather, a woman is to be arrayed in "modest apparel." The Apostle Paul addresses the modesty of a woman in his first letter to Timothy. "In like manner also, that women adorn themselves in modest apparel, with shamefacedness and sobriety; not with broided hair, or gold, or pearls, or costly array; But (which becometh women professing godliness) with good works" (1st Timothy 2:9-10, KJV). The Greek word translated "modest" is the Greek word "kosmios" and this word is translated twice in the New Testament. It is seen once as "modest" in this passage and is once translated as "of good behavior" in 1st Timothy 3:1. It came to mean well-arranged, seemly and modest.
The word "apparel" is the Greek word "katastole" and it is translated as apparel only here in 1st Timothy. The meaning of the word "katastole" was to send or to let down or lower, and it was connected with "kastastello," which means to send. It was primarily a garment that was let down, and came to mean dress or attire in general, and in that day referred to a stole or a loose outer garment worn by kings and persons of rank. Therefore, the context here is important. Since we know that the Apostle Paul was not speaking to people of rank, the context here is simply modest attire, and it does not specify what that entails. The Apostle Paul addressed this issue here because the women in the church were trying to see who could out do whom in how they dressed – the flashier the better. They were doing that and losing site of the things that should adorn a godly woman, that of humility, sobriety, godliness, and good works. The words "modest apparel" are not used here in the context of specific garments. It refers to being clad in a modest covering. It should not be separated to prove a commandment against wearing pants (also see 1 Peter 3:3-4).
So, the issue is that a woman should wear modest clothing. Whether or not that includes a dress or a pair of slacks, it is a woman's own conscience before the LORD that should be the arbiter of her choice. If a woman allows her outward appearance to be the measure of her inward relationship with Christ, she is living under the constraints of legalism. The Apostle Paul writes, "All things are lawful unto me, but all things are not expedient: all things are lawful for me, but I will not be brought under the power of any" (1 Corinthians 6:12, KJV). Born again women are free in Christ to wear whatever modest apparel they chose and the only judgment that they should be under is that of their own conscience. "…for whatsoever is not of faith is sin" (Romans 14:23, KJV). We are not to allow our consciences to be dictated to by "legalism" and the consciences of others, but by our own relationship with Christ. "I am crucified with Christ: nevertheless I live; yet not I, but Christ liveth in me: and the life which I now live in the flesh I live by the faith of the Son of God, who loved me, and gave Himself for me" (Galatians 2:20). God will take care of the outward woman if we walk in obedience in the inward woman.
Recommended Resource: A Woman After God's Own Heart by Elizabeth George .