Theoretically speaking, there is widespread confusion about the word "theory." Right?
Many people interpret the word as iffy knowledge, based mostly on speculative thinking. It is used indiscriminately to indicate things we know — that is, based on solid empirical evidence — and things we aren't sure about. Not a good mix at all, especially when certain theories speak directly to people's religious and value-based sensitivities, such as the "theory of evolution" or "Big Bang theory." There is also the danger of falling for meaning traps set by groups with specific agendas.
Looking at the New Oxford American Dictionary (NOAD) listing for "theory" doesn't help:
a supposition or a system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained: Darwin's theory of evolution.
A set of principles on which the practice of an activity is based: a theory of education.
An idea used to account for a situation or justify a course of action: my theory would be that...
So, there is usage within a scientific context ("the theory of...") and in a subjective context ("my theory is...") — an obvious problem.
When used in the context of a phrase, as "in theory," it gets worse. According to NOAD, "used in describing what is supposed to happen or be possible, usually with the implication that it does not in fact happen." [My italics.] Clearly, in this context, "in theory" means something that is probably wrong.
No wonder there is confusion. It is confusing!
A first step in trying to clarify the meaning(s) of theory is to understand in which context the word is being used, and to keep different contexts separate. So, if a scientist is using the word theory, as in "theory of relativity," "theory of evolution," or "Big Bang theory," it should be understood as a statement within a scientific context. In this case, a theory is certainly NOT mere subjective speculation, or something that is probably wrong, but, quite the contrary, something that has been scrutinized by the scientific process of empirical validation and has, so far, passed the test of explaining the data.
Unfortunately, even within the scientific context the word is misused, which only adds to the confusion. For example, "superstring theory" refers to a speculative theory in high-energy physics where the fundamental building blocks of matter are not elementary particles but tiny vibrating tubes of energy. Given the lack of empirical support so far for the idea, "superstring hypothesis" would be a much more appropriate characterization. Scientists may know the status of the hypothesis, but most people won't. We should be more careful.
A scientific theory is an accumulated body of knowledge constructed to describe specific natural phenomena, such as the force of gravity or biodiversity, that has been vetted by the scientific community. It is the best that we can come up with to make sense of nature at a given time.
Mind you, as our understanding of natural phenomena change, theories can change as well. This doesn't necessarily mean that the old theories are wrong. It usually means that the old theories have a limited range of validity not covered by newly discovered phenomena. For example, Newton's theory of gravity works really well to send rocket ships to Neptune, but not to describe a black hole. New theories are born from the cracks in old ones.
Unfortunately, suspicion of certain scientific theories can come from confusing subjective speculation with objective description. A scientific theory is different from a scientific hypothesis. A scientific hypothesis is an idea not yet empirically tested and, hence, still not vetted by the scientific community. A theory is a hypothesis that has been tested and vetted.
Much popular confusion could be avoided if the word theory would be understood within the right context. The often-used trap of exploring the double meaning of the word theory to confuse or willfully misguide popular opinion should only catch those who don't know, or choose to neglect, what theory means within its scientific or subjective context.