We used the process Evan describes to make parts of molds for powdered metal parts, in this case electrical contacts. The contacts themselves were to have a pattern of small square pyramids standing up from the surface, so the mold had to have the female equivalent of little square depressions. These components were HSS, so the pattern was pressed into the ends of the annealed blanks by hobbing. Then the remaining part was machined, the parts hardened and ground, and the pattern polished with diamond compound.
I don't know either why two such different machining processes came to have the same name. Probably origins in unrelated places or disciplines.
"In theory there’s no difference between theory and practice. In practice there’s a lot of difference.” Yogi Berra