Cacao is the plant and all its products, before processing. Cacao refers to the unprocessed seed of the cacao tree, although some industry members use the term "cocoa" to refer to the plant and its seeds.
Chocolate is the product of the seeds of the cacao plant after processing, whether liquid or solid.
Chocolate Liquor—despite its name—doesn't contain any alcohol. It's actually just simple, unsweetened baking chocolate made from the ground up nibs (the meat) of the cacao seed. Chocolate liquor is actually about half cocoa butter and half cocoa solids.
Cocoa Butter is the vegetable fat contained in the cacao seed. Chocolate liquor is pressed to squeeze out the cocoa butter. Cocoa butter is solid at room temperature but melts easily in your mouth or at room temperature.
Cocoa Powder is the defatted powder made from cacao. It's the solid portion that remains after the cocoa butter has been pressed out of the chocolate liquor. Cocoa powder is categorized by the amount of cocoa butter that remains after pressing. Retail cocoa products can range from 10% to 24% fat, depending on whether they're beverage, breakfast, or cooking cocoa.
Baking Chocolate is a solid chocolate made from pure chocolate liquor, no sugar or milk added.
"Dutched" or "Dutch" Chocolate is made from chocolate liquor or cocoa powder that has been treated with alkaline salts to give it a darker color and a milder flavor. The process—which came to be known as "Dutching"—was invented in Holland by the chemist Coenraad Van Houten.
Milk Chocolate is a mixture of chocolate liquor, cocoa butter, milk, sugar, and flavorings. All milk chocolate made in the United States must contain at least 10% chocolate liquor and 12% whole milk.
Sweet Dark Chocolate contains 15% to 35% chocolate liquor and less than 12% milk solids. It may also contain ingredients like condensed milk, cocoa butter, sugar, and vanilla.
Semi-Sweet or Bittersweet Chocolate is the darkest eating chocolate and has at least 35% chocolate liquor, in addition to sugar and cocoa butter.
Chocolate Flavored Chips and Coatings are compounded from cocoa powder and vegetable fats other than cocoa butter. They don't require tempering and are less expensive than chocolate made with cocoa butter.
White Chocolate is a blend of cocoa butter, milk, sugar, and flavorings. It contains no cocoa solids, and many people don't consider it chocolate at all! According to U.S. Standards of Identity, in order to be called chocolate, it must contain chocolate liquor (but then it wouldn't be white.)
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