We present a detailed study of pentacene monomer and dimer that serves to reconcile extant views of its singlet fission. We obtain the correct ordering of singlet excited-state energy levels in a pentacene molecule (E (S-1) < E (D)) from multireference calculations with an appropriate active orbital space and dynamical correlation being A incorporated. In order to understand the mechanism of singlet fission in pentacene, we use a well-developed diabatization scheme to characterize the six low-lying singlet states of a pentacene dimer that approximates the unit cell structure of crystalline pentacene. The local, single-excitonic diabats are not directly coupled with the important multiexcitonic state but rather mix through their mutual couplings with one of the charge-transfer configurations. We analyze the mixing of diabats as a function of monomer separation and pentacene rotation. By defining an oscillator strength measure of the coherent population of the multiexcitonic diabat, essential to singlet fission, we find this population can, in principle, be increased by small compression along a specific crystal direction.