When is referendum used?

Answer 1

In the United States, the term "referendum" typically refers to a popular vote to overturn legislation already passed at the state or local levels (mainly in the western United States). By contrast, "initiatives" and "legislative referrals" consist of newly drafted legislation submitted directly to a popular vote as an alternative to adoption by a legislature. Collectively, referenda and initiatives in the United States are commonly referred to as ballot measures, initiatives or propositions.

There is no provision for the holding of referenda at the federal level in the United States. However, the constitutions of 24 states (principally in the West) and many local and city governments provide for referenda and citizen's initiatives. The most famous U.S. state initiative is probably California's Proposition 13 which severely limited property tax increases. They are especially popular in modifying state constitutions.

See: http://en.wikipedia.org/wiki/Referendum#United_States

Every state uses slightly different terminology. Here in Washington a referendum is when the legislature has created a bill, however they placed it on the ballot instead of directly enacting the bill. An innovative is when a citizen drafts legislation (a law) and gets it placed on the ballot by collecting enough signatures on a petition.