Localization vs Translation from a Drupal perspective
In Drupal, the terms "localize" and "translate" have special meaning (beyond the typical Internationalization/Localization meanings).

"translate" - this typically means that you end up with a "translation set" of objects. For example, an English source node with its German &amp; French translated nodes (3 related objects). Or, a French source taxonomy term and its Spanish translated term (2 related objects).

"localize" - this typically means that you only have one "object" but can translate the textual information related to the object via string translation. For example, for a menu item, you have one English menu item but then translate the title of the menu item into Spanish (while both languages have the same link).

I've sorted this all out because I'm writing a book on Drupal 7 multilingual sites for Packt that will be out very soon: http://www.packtpub.com/drupal-7-multilingual-sites/book