> How is the reader expected to know whether italics is used in printed 
> matter to indicate a defining occurrence, or to emphasize, or to indicate 

The reality is that, in general they do, typically because the context of
the use and their linguistic knowledge allows them to do so.  Given the 
limited presentational repertoire, traditional typography authors will,
of course, avoid ambiguous contexts, but I don't think that ambiguity
is actually very common.

> a foreign word, or because it is a variable, or due to a special 
> convention like italicizing symbols of quantities in physics, or just for 
> esthetics? Similar considerations apply to web pages using markup like 
> <dfn>, <i>, <cite>, etc.

<dfn> etc., give the potential for machine processing (which is generally
much worse than humans at understanding natural language, to recognize the
fact and also allows for national and house style variations in the 
presentational form of the concepts.  An example of a house style case
is Wikipedia (which although not using <dfn>, uses bold rather than italics
for defining references).