how (and why) to insist on correcting those who misuse the term translation

When we conflate and confuse translation (written) with interpretation (oral) we dumb down our ability as a movement to understand and address our different language needs.

These are two related but different skills. You would not assume someone good at writing was good at public speaking, nor conflate those two. Why would you then when those same tasks are made more complex? 

municipio and municipality are false cognates

I am both a geographer and a translator, so this is a total geek out. In English municipalities are only urban and don't usually have political units inside them (boroughs are a rare exception). Municipios are often rural, or a mix of urban and rural, quite large, and have all sorts of other units inside them (veredas, corregimientos, etc). Municipios are much more like US counties, but counties seem to be much larger in the UK so I'm not sure if the term would still hold for a UK audience. There are 48 counties in the UK; 1,122 in Colombia; and 3,007 in the US. Some Canadian provinces have counties, so it should work for Canadians. Australians used to have counties but apparently generally don't know the term today.

If you're trying to reach a global English speaking audience local is another fudge option. If you are talking about, say, the unidad para las victimas del municipio, it might work to render this just as the local unit for victims. 

Of course if you're translating not interpreting you can use the false cognate and include a translator's footnote - but how many people will really read and remember it? 

The image here is a map of the Oct 2016 vote on the Colombian peace accord by municipio made by  Carlos Felipe Reyes.