Production Design
Here is an excerpt taken from Wikipedia.
In film and television, a production designer (PD) is the person responsible for the overall visual look of the production. Production designers have a key creative role in the creation of motion pictures and television. Working directly with the director, cinematographer, and producer, they must select the settings and style to visually tell the story. The term production designer was coined by William Cameron Menzies while he was working on the film Gone with the Wind.[1] Previously (and often subsequently) the people with the same responsibilities were called art directors.[2] It is sometimes also described as scenic design or set design.
Wikipedia: Production Designer
What does an art director do?
There was always some mystery about the title to me and from my experience, this is how I see it. As an art director in Hollywood, I worked on TV commercials, music videos, editorials and films. My main focus was on TV commercials and editorial works and a music video as long as they had a budget, or I felt it was worth it.
I realized that there were two art directors in the TV commercial world. One art director was on the production side (me) and one was on the agency side. The agency art director worked with the client coming up with the creative for the spot and the art director on the production side, worked with the agency art director, the director, producer and sometimes the client.
So on to what does an art director, on the production side do. For me I started working every job in the art department, starting as a truck driver, then set dresser, decorator, props, leadman, assisting and learning all the way. I eventually became an art director, then production designer.
“The client may be king, but he's not the art director”
Wikipedia has a great article about the types of art directors and what they do.
Wikipedia Link: Art Director