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When sending an ethereum transaction, applications like geth will lock and unlock the ether account being used with a password. But what if I generate a public and private key offline, do I still need to unlock (and first create) the account with geth before sending a transaction from that account with web3?
In short, is the lock and unlock password somehow included in the blockchain or is it only being used to encrypt the private key in the wallet key file?
If you generate the private/public key pair offline you will not need to unlock to send a transaction. However, this may not be the case if you import the key into Geth. Basically there are 2 routes: 1) create tx, sign with private key, send rawtx to geth or another node, or 2) create a transaction and sign the tx using geth (assuming you've imported the keys).
TLDR: the lock/unlock password is only used to decrypt the local keystore file.
Take a look at this process of sending a transaction offline and I think it might make more sense: Send an offline transaction - github
