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Terminal is where you enter text, send to your computer, and it send some text back. This is a terminal on modern computer. Modern computer have terminal bundle in with the computer too.
But in 1970s-1980, computer are big, it is more a server than a computer. You need a separate device to connect to your computer, type command and send to your computer. That device call a terminal. It still function same way today: you type text in, it send to computer, it get response, show to you.
Terminal also print text history to paper, or show on screen, or both, depend on device you get.