Words convey meaning while terms have a more precise definition. Words have their own definitions but how they are used or expressed gives them a more distinct meaning.
The word blue brings to mind the color of the sky or a deep ocean. But a blue mood or experiencing the blues describes a person's mood—their emotional feelings.
Terms and terminology are often used to categorize something specific to a field of study or group of people. Terms can be technical and precise or an idiomatic expression or slang.