The university from some historians and conservative commentators for its , which says it's more appropriate to use the word "invasion", rather than "settlement".
Adopted by UNSW in 2012, the guide also advises against saying that Captain Cook "discovered" Australia.
"Aboriginal and Torres Strait Islander people were in Australia long before Captain Cook arrived; hence it was impossible for Cook to be the first person to 'discover' Australia," it reads.
"Most Aboriginal people find the use of the word 'discovery' offensive."
UNSW media student Rebekah Hatfield says that rather than stifle debate, the guidelines actually create a safe space for Indigenous students to learn.
"We've been having conversations with staff members for years... around how they can actually create safe spaces for Indigenous students to actually come and learn, and discuss topics that are very real to us but might not be that real to the rest of the cohort," she says.
"I think it's really great that we are in an environment where we can discuss these things that are not particularly easy to talk about.
"If we can't do it here at university, in a place that actually is about learning and understanding... then where can we start to have those conversations?"
The terminology guide, originally developed as part of a Diversity Kit by Flinders University in 2004, advises teachers on the most appropriate ways to discuss society, culture and history.

The Daily Telegraph's front page accuses UNSW of rewriting history. Source: NITV
Conservative commentators, including Herald Sun columnist Rita Panahi, condemned the language.
"This eagerness to rewrite Australian history and to cast us as this awful nation that should be ashamed of its past I think is really quite unhealthy," she told Channel 7.
2GB talkback host Alan Jones slammed the guidelines as "political correctness at its worst", while fellow radio host Kyle Sandilands said the university should "get over it, it's 200 years ago".
Ms Hatfield says those kinds of attitudes are "denying the history of our people".
"When you hear comments like 'this is political correctness gone mad', it's a little frustrating because this is our reality," she says.
"The Indigenous community is mobilising. We want the rest of Australia to recognise the history of Australia, and that extends back past James Cook.
"And in doing so, how much richer of a culture is Australia going to have?"
Meanwhile, the university has drawn praise from the New South Wales Aboriginal Land Council.
“Our universities should be commended for ensuring future generations of Australian and international students are provided with facts, not outdated campaigns based on dividing the country," says land council Chair Roy Ah-See.
“To continue to claim that Aboriginal land in Australia was settled, not invaded, by the British is the greatest example of rewriting history in this country today."
Terminology guides 'commonplace'
Terminology guides such as these are "commonplace across universities and many public sector organisations," a UNSW spokesperson said in a statement.
"It is absolutely appropriate for students and staff to have such a resource available," the statement reads.
"The guide is not required reading for all students across the University - teachers can choose to include it as a resource for their class."
Similar terminology guidelines, all refuting the notion that Captain Cook 'discovered' Australia, have been adopted by the , the , and .
The UNSW guide was taken from a 1996 teaching framework, later published as a for teaching Aboriginal studies.
See the full story tonight at 9pm on The Point

Source: NITV News