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Direct Current? Joking aside, ambiguous 2 letter acronyms is not really a good way to reference a US city, since there are folks here who are not in the US.

Sometimes, other times no. Referring to the seat of the US government as "Washington" is apparently just too much fun for journalist types, so an unqualified reference to it is often ambiguous in practice.

To the rest if the world, no. Washington is used to refer to the whole country of the USA

yes, or even "The District"

Isn’t the state of Washington in Seattle? which means something else entirely.

Seattle[0] is the city in the state called Washington[1]. I was under the impression that when just 'Washington' was used, it refereed to the state. But looks like even Washington, D.C (formally District of Colombia [2]) is called just Washington[2].

[0] https://en.wikipedia.org/wiki/Seattle [1] https://en.wikipedia.org/wiki/Washington,_D.C. [2] https://en.wikipedia.org/wiki/Washington_(state)