What is an android ROM? I know this question is answered all over the web however I don't understand why its called a custom ROM. 

Isn't the android OS partition stored in read/write memory? but just classed as read only memory by android so you cannot modify it with regular user permissions.

If so, a custom rom isn't actually modifying read only memory, so why isn't this referred to as flashing a custom os?
As mentioned on Android Police,


  By the way, the word ROM means Read Only Memory, but has migrated in the modding community to mean an actual custom OS image that you install into the ROM area of your phone.


For me, the reason I still use the word ROM is that the image you flash contains the entire contents of the read-only system partition which would be called the ROM.