Final answer:
Scabies is a highly contagious skin disease caused by mites, characterized by itching and rash, which is not to be confused with fungal infections such as ringworm or athlete's foot caused by dermatophytes.
Step-by-step explanation:
The highly contagious skin disease caused by a parasite called a mite is Scabies. This condition is characterized by severe itching and rash, often in the area of the body where the mites burrow. Tinea infections, often referred to by common names such as ringworm, athlete's foot, and jock itch, are all examples of fungal infections, not parasitic infestations like scabies. Ringworm presents as a ring-shaped rash but is not due to a worm; it's a result of a fungal infection by dermatophytes from the Trichophyton genus, which can also cause athlete's foot when affecting the skin between the toes.