Orcs and goblins, same thing?

In large fantasy worlds, like that of Warhammer or Warcraft, orcs and goblins are very common. These are often treated as different species and by all right, there are great differences between orcs and goblins in these worlds. This is probably a cause of the common perception that orcs and goblins are always two completely different creatures, which is not the case in the world of Tolkien.

In The Hobbit Gandalf tells the company ”...you would be right among the slopes of the Grey Mountains, and they are simply stiff with goblins, hobgoblins, and orcs of the worst description”, which could make anyone assume that orcs and goblins are different things. In the author's note, however, one can read that orc is usually translated goblin (or hobgoblin for larger kinds). Elrond even gives an example of this:

They were made in Gondolin for the Goblin-wars. They must have come from a dragon’s hoard or goblin plunder, for dragons and goblins destroyed that city many ages ago. This, Thorin, the runes name Orcrist, the Goblin-cleaver in the ancient tongue of Gondolin; it was a famous blade. This, Gandalf, was Glamdring, Foe-hammer that the king of Gondolin once wore.

This tells us that (1) Orcrist and Goblin-cleaver are two names for the same sword and (2) goblins were present at the fall of Gondolin. In The Silmarillion goblins are not mentioned at all, but there are lots of orcs. In a letter to Milton Waldman, Tolkien wrote ”Also the Orcs (goblins) and other monsters bred by the First Enemy…” (1951) so there is really no doubt about it, orcs and goblins are the same. I have to admit that it feels wrong though as the word goblin is easier to associate with smaller creatures while orc sounds like something bigger. To me it is all about perspective, in The Hobbit Azog is described as a goblin but in the appendices he is described as an orc. As The Hobbit is more of a children's story the word goblin seems more fitting while orc fits better in the more "mature" story of LotR, eventhough both words are used in both works. 

In another letter Tolkien wrote "Your preference of goblins to orcs involves a large question and a matter of taste, and perhaps historical pedantry on my pan" (1954). He also mentions the goblins of George MacDonald and that he prefer the word orc simply because it is not goblin. The book The Princess and the Goblin by MacDonald (which is the only of his books that I have finished) has a feeling of fairy tale to it, and it is of course not the only occurrence of goblins. The orc can not be associated with creatures in older works of fiction or folklore like goblin can, so I suppose that the use of orc rather than goblin in LotR and The Silmarillion only makes sense, as does the use of goblin in The Hobbit.