In day to day conversation, people use it interchangeably with the word opinion (or as you mentioned hypothesis).
"My theory is the government should such and such." This is bogus! So later, when someone hears about the "theory" of evolution, it strikes them as something with which they can disagree.
A common distinction made in science is between theories and hypotheses, with the former being considered as satisfactorily tested or proven and the latter used to denote conjectures or proposed descriptions or models which have not yet been tested or proven to the same standard.