I was also under the impression that American naming systems tend to be the opposite of what many countries follow. I may be wrong.
Unfortunately, the terms 'socialism,' 'communism,' 'capitalism,' 'fascism,' 'liberal,' 'libertarian,' and 'conservative' have been so far removed from their original meaning and context in their use within the United States and so loaded by political parties that a typical/average American's perception of what these words actually mean is worthless outside of the United States.
Also, actual 'conservativism' is a branch of classical liberalism, which is why conservative parties can legitimately refer to themselves as Liberals. Typically this manifests as fiscally conservative and socially liberal/libertarian. Most of the Canadian 'Liberals' sit under these politics.
Indeed. American definitions are basically:
Socialist/Far-left: Any welfare capitalist to the left of the Republicans. Generally used in an insulting manner.
Communist: Same as above except more insulting (and paranoid). It should be noted that communism is actually a form of anarchy, and thus even the extreme state socialists it has traditionally been applied to don't qualify (Stalin was not leading a transition to anarchy).
Capitalism: Whatever form and degree of welfare capitalism the Republicans happen to support.
Liberal: Someone who supports more government control of the economy (and other stuff outside of gay marriage, abortion, religion, and sometimes drug use) than the Republicans.
Conservative: Someone who supports less government control of the economy (and more control of people's personal lives) than the Democrats.
Libertarian: Someone with more socially liberal viewpoints than the Republicans and as much or more rightist views (outside of foreign intervention) than the Republicans.
Fascist/Far-right: The former is not often used. The latter is sometimes used to smear welfare capitalists to the right of the Democratic Party, as well as religious fundies.
When both parties support the same basic economic and political system, definitions will become warped as they use insulting rhetoric to make their opponents look more extreme than they actually are.