What is terminology?
Terminology is the field whose objective is to identify and name the concepts belonging to specific subject areas in order to enable precise and unambiguous professional communication .
Why is terminology important?
Consistent terminology is critical for high quality products. If a product uses inconsistent terminology, then users will get confused. In an international marketplace, consistent terminology is even more important, because when inconsistent terms are localized, they can diverge even more in the target language than in the source language.
What type of concepts is terminology concerned with?
Terminology is primarily concerned with concepts of a given subject area, and then works towards the names for those concepts. An ideal terminology process would start with analyzing the concept system of a domain and how those concepts relate to each other. Once the concept system is clear, then a single designation (term) is applied to each concept and a definition is written for it. Terminology is not concerned with general-purpose words.
How is terminology different from creating dictionaries or glossaries?
The field that is responsible for creating dictionaries is known as lexicography. Lexicography is concerned with words first, and then works towards identifying the concepts behind those words; the direction is the opposite of terminology. In lexicography, words often have multiple meanings, whereas terminology is very selective and ideally only allows one term for each concept in a subject area.
How is terminology related to localization?
Terminology can be a very beneficial input to localization, and the two fields can be part of a larger content creation process, but terminology is not a component of localization. Terminology can be used for content that never gets localized; this would likely be the case for documentation that is internal to a company. Conversely, a relatively small portion of the words that get translated are actually terms.
Where is the terminology stored, and who manages it?
Terminology is stored in a term database (abbreviated TD or TB), and a terminologist (or term admin) manages the terms. There can be many sources for terms (automated term harvesting, manual term submission, etc), but the terminologist ultimately owns the term entries and making sure that designations and definitions conform to established standards.
 Cabré, M. Teresa. Terminology: Theory, Methods, and Applications. Amsterdam: J. Benjamins Pub., 1999. Print.