A term names an object. Just like a noun in natural language — “Socrates”, “the father of Socrates”, “zero” — it points to something in the world. You don’t ask whether a term is true or false. You ask what it refers to.
Once a structure fixes the meaning of the constants and functions, every ground term picks out a specific individual. Variables are pronouns — their referent depends on the assignment.
Formulas make claims. Terms supply the things those claims are about.