Search Google on Geothermal and you will find a hundred companies using the word to describe ground source heat pumps, two systems that have one thing in common only: they sit on and in the ground. Even government organizations muddy the story by calling them "geothermal heat pumps." Philip Proefrock does a good job of explaining the difference at Green Building Elements, but it comes down to this:
Geothermal systems use heat directly from natural sources like hot springs, geysers and volcanic hot spots like the installation on the right in Iceland.
Ground source heat pumps are air conditioners that use groundwater or simply soil to cool the condenser instead of an outside coil and fan. It uses electricity to move heat energy from one place to the other. Run it backwards and it provides heat, more efficiently than using the electricity directly.
So why has everyone started calling GSHPs Geothermal? ::Green Building Elements