A simple string change would go a long way here. We should block the MD-settings launch on fixing this.

There are three HC articles for three separate reset operations:

Browser Reset
Hardware Reset
Factory Reset

In all cases nomenclature is applied loosely, including using the single word "reset" to describe all three operation within their respective articles. Unless nomenclature is distinct, clearly defined, and applied consistently, this will only cause greater confusion.

For instance, in the Factory Reset article it recommends "Before you factory reset your Chromebook try: reset your hardware."

Those terms are ambiguous: since "hardware" would normally be an acceptable description of a Chromebook. Will non-technical users be able to easily parse the difference between the two? If we suggest they 'factory reset their Chromebook', and they remember having 'reset the hardware', it doesn't seem unreasonable for them to report that they've already tried that suggestion without success.

To illustrate the point, OP recommends changing the "Powerwash" button label to "Reset" as described in HC, but the article linked to is for the "Hardware Reset", not the "Factory Reset" as would apply to the "Powerwash" term. If highly technical users with lots of experience with the platform can't easily keep these terms straight, what hope do average users have?

While admittedly "PowerWash" is not an industry standard term, it at least has the twin virtues of being distinct and memorable.

#3, my mistake for the bad HC article link. Sorry. It should be
https://support.google.com/chromebook/answer/183084?hl=en&source=genius-rts

Note that the HC article has recently been edited.
"In the "Powerwash" section, click Powerwash."

The HC and Settings menu obviously need to conform to each other, but the confusion about reset types is still the issue. HC is much easier to edit than Settings.

This absolutely needs to be done, sooner rather than later. I don't know why we invented the word "Powerwash" when Android has already been using the term "Factory Reset" which does the exact same thing for years.

The Chrome OS UI nomenclature needs to match the recently updated HC article, that the OP linked to. Nobody knows what a Powerwash is. Everybody knows what a Factory Reset will do. 

Powerwash is the most misleading term anyone could have invented. Let's use terms that give some indication of their real meaning: hardware reset, software reset, browser reset are my suggestions. They may not be ideal but at least are an improvement on the existing terminology.

It seems like a change to "Factory reset" could make things clearer.

However, MD Settings (chrome://md-settings) already moves "Reset settings" and "Powerwash" options into a single section called "Reset", which will make the "Powerwash" option easier to find for users looking to reset their devices. That, along with a description that clearly explains what will happen ("Remove all user accounts and reset your Chrome device to be just like new") seems like it could be clear enough.

Regardless of which way we go, we should of course keep the HC and Settings pages in sync.

I prefer Factory reset but a powerwash is OK as long as it's explained and searchable and the HC title page and UI are in sync, which has not been the case. The explanation is what concerns me and in particular, your.local.files.will.be.lost.deleted.gone forever.

"Remove all user accounts ..." makes it appear that if you just add your user account again, you can access your local files again. Users have a Windows mindset and a lot probably buy a Chromebook after using the Chrome browser, where local files are not lost or deleted after you disconnect your Gmail (user) account from Chrome.

Before a user can see the blue "learn more" to find out what this mysterious powerwash is, he/she has to click on powerwash first, then on the learn more which directs to the help page called "Reset your Chromebook to factory settings". Two different descriptions for the same action. He/she may also just click on "restart" either by accident or on purpose without reading anything.

Imho, it would be better if the learn more links are on the settings page just like for the Accessibility settings.

Could you please add "all files in the local Downloads folder will be deleted" when you powerwash to be just like new aka reset your chromebook to factory settings?

I can't stress enough the number #1 all time misunderstanding and unhappiness among users is that their local files are not safe from deletion. 

A powerwash is often the only fix from a browser crash, an extension/app interfering, a malware attack, a profile corruption, a password reset, a forgotten password or running out of local storage. And let's not forget, a powerwash from the login screen by anyone with access to the chromebook, or any other as yet unforeseen reason.

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I don't mean to add to the confusion but the description for a 'Powerwash' or 'Factoy Reset' says: 

"Remove all user accounts and reset your Chrome device to be just like new"

In reality, only a full recovery will do that, restoring all partitions to the OEM structure and sizes.

If one has resized or added partitions for 'ChrUbuntu/chrx', etc. or even added a partition for 'crouton in a separate partition', then a 'Powerwash' will leave those partitions and sizes intact.

I bring this up because some have fiddled with their Chromebook partitions in Developer mode and ended up running out of space and are confused when a 'Powerwash' doesn't 'reset their Chrome device to just like new' and recover the lost space.

#14 - Great point.

(Bulk Edit) Adding the new conops Chrome OS hotlist to all open issues with the "#CBC-RS/TC-watchlist" tag, our former tracking tag.