The pygmy was bred as a meat and pet animal while the ND was bred as a dairy animal. As with any animal, you will see some that don't conform to their breed but in general, the pygmies are known for their stocky build and round barrels while the NDs are supposed to look like a miniature dairy goat. The key to the ND is that it is supposed to be proportioned so that it doesn't look like a dwarf. Someone here recently mentioned that it should look like an alpine scaled down (except for the color). As mentioned here, NDs are known for their wild variety of colors and patterns.
Some animals at first blush, especially to the untrained eye, appear to be a breed outside their own. For instance, a roaned ND may be mistaken for an agouti pygmy. The coloring is similar so that is the first thing someone thinks - that is a pygmy. But if you look closer, you will see the build is completely different. It's easier when they are mature, of course. I am not bothered by color since I am not a color breeder, but it is noteworthy to consider colors and patterns as they embellish or detract from the overall appearance of the goat and the likely genetics passed on (in relation to their current and future market). Some folks are really turned off by anything that even a novice might mistake for another breed so they avoid the grays and roans, etc. Some don't even like frosted muzzles and ears (even LIGHT frosting).
Anyway, pygmies and NDs have similar origins so sometimes are hard to distinguish from one another. Sometimes they give you throw-backs too.