A dictionary
defines words, and sometimes gives their etymologies.
Not just sometimes; a good dictionary should include the etymology as a
part of the history which defines the word.
Pocket dictionaries often skip the etymology, or perhaps give an
extremely abridged version. Any large dictionary should give full
etymologies, certainly.
A dictionary is better equipped to deal with the
distinctions between
American and British usage An encyclopedia, when explaining the
underlying concept, would do better to choose a word which avoids such
ambiguities.
I wasn't really thinking about different dialects, I was thinking
about the same word being used for two concepts by one group of
people. (I can't think of any non-fictional examples, though...)