We describe a systematic development of kinetic entropy as a diagnostic in fully kinetic particle-in-cell (PIC) simulations and use it to interpret plasma physics processes in heliospheric, planetary, and astrophysical systems. First, we calculate kinetic entropy in two forms -- the ``combinatorial form related to the logarithm of the number of microstates per macrostate and the ``continuous form related to $f ln f$, where $f$ is the particle distribution function. We discuss the advantages and disadvantages of each and discuss subtleties about implementing them in PIC codes. Using collisionless PIC simulations that are two-dimensional in position space and three-dimensional in velocity space, we verify the implementation of the kinetic entropy diagnostics and discuss how to optimize numerical parameters to ensure accurate results. We show the total kinetic entropy is conserved to three percent in an optimized simulation of anti-parallel magnetic reconnection. Kinetic entropy can be decomposed into a sum of a position space entropy and a velocity space entropy, and we use this to investigate the nature of kinetic entropy transport during collisionless reconnection. We find the velocity space entropy of both electrons and ions increases in time due to plasma heating during magnetic reconnection, while the position space entropy decreases due to plasma compression. This project uses collisionless simulations, so it cannot address physical dissipation mechanisms; nonetheless, the infrastructure developed here should be useful for studies of collisional or weakly collisional heliospheric, planetary, and astrophysical systems. Beyond reconnection, the diagnostic is expected to be applicable to plasma turbulence and collisionless shocks.