It gets confusing, as what most midwest farmers call terraces aren't. They are usually drainage ditches or berms.
"You must be the change you want to see in the world." "First they ignore you, then they laugh at you, then they fight you, then you win." --Mahatma Gandhi
"Preach the Gospel always, and if necessary, use words." --Francis of Assisi.
"Family farms work when the whole family works the farm." -- Adam Klaus
I just think of a berm as a man made long hill. Sometimes at the bottom of a hill but not necessarily. When I was a girl the mountain bike crowd would build berms to ride on and over. A friend used the soil he dug out for his foundation to build a privacy berm around his property.
Terraces are like steps on the side of a hill that make a flat place. Often for agriculture. It makes a steep place more useful to people.
Yes, they are very similar. And in the real world there are things that might be halfway in between, so the differences might not be so neat as the definitions suggest.
Functionally, a berm is usually used to stop something, wind, or water, or bullets or a view of the neighbors. A terrace is usually done to provide a flat area for agriculture on a steep hill that would otherwise be awkward to work on because of the steepness .