So what magically occurs when we use the right word?
What are you asking? It clearly makes a difference to the process of coming up with a solution. If someone commits a crime, you look for what typically correlates with crime. Was it caused by poverty? Out of anger? Was he just a sociopath? And depending on the answer, you can look for applicable solutions. If it is a terrorist act, then the cause is very likely to be different.
No single categorization fully explains a social phenomenon, but using a less descriptive category when a better one is available is pointless.