Items, entities and objects are often seen as "labels" within the interface because they are most prevalent as the labels on forms, detailed page views and report/list headers. For example, the project item field name for the project name is simply "Name" and it is found within the Fields for the Project item.
You could change "Name" to Spanish by using "Nombre" instead. You would not want to rename it "Proyecto Nombre" because the naming logic in your reports will automatically use that label just as it does in the English language. You separately change the name of the "Project" item to "Proyecto" so that anywhere the label calls out the item name along with the field in the item it will string the two together as "Proyecto Nombre."