The Japanese language has two separate words equivalent to the two usages of the English word, 'theory'.
理論 [RI-RON]
A system of knowledge built on logic to systematically and uniformly explain individual phenomena. In addition, a purely logical knowledge corresponding to practice.
説 [SE-TSU]
1. A principle (belief) or claim for certain things.
2. Rumor.
I tried to translate the Japanese definitions as faithfully as I can into English. The first word, 'ri-ron', is equivalent to the scientific usage of the English word, 'theory' (as in 'the theory of evolution' or 'the theory of relativity'), while the second word, 'se-tsu', is equivalent to the common usage (more like 'I have a theory!'). Setsu doesn't need to be substantiated and can be wild claims.
It's a shame the English language doesn't have two separate words; we can avoid a lot of confusion.
Comments
It does--"theory" is correct in, say, "theory of evolution" or "germ theory of disease" or "theory of plate tectonics." The correct word for the common "usage" of "theory" is, in many instances, "hypothesis"; in other instances, it's "guess" or "supposition."
It can, but it shouldn't, just the same way that I could call a TV show a "movie" (it is a moving picture, after all), but shouldn't. Just because everyone does something incorrectly does not, per force, make it correct!