The two words are interrelated because they have some common meaning; that is why they are confusable. For example, both of them have the meaning of being able to do something. Competence describes what a person can do because they have the ability and the skills, or they possess the required qualification. In legal context, competence of a witness means the mental capacity to participate in a legal process. Competence can occur in science, too. Meanwhile, competency refers to being able to bring something into effect because the person or a group, for example the authorities are legally qualified for it.
These words are interrelated and have almost similar meanings, so there is a lot of confusion around them.
Competence is a noun that describes the ability of a person to be qualified to do a job, to one’s ability or skills and knowledge that he possesses. In the industry it refers to specific requirements from an individual to perform a given job.
The word competency (also a noun) is the quality or state of being legally qualified. In industrial jargon, it refers to description of skills and knowledge along with experience and other attributes that are necessary to perform a task or job. In simple words, competencies are skills required for a job.
