Both of the words. Nevertheless, the term "thesis" is more proper to be used for the works, containing a discovery or a new sight of an existent problem.
I am of the view that it is both a dissertation and a thesis. A dissertation because it elabotares theoretically and empirically on a certain topic, It is not a mere coincidence that a Ph D dissertation is longer than a paper or published article. It is a thesis because the dissertation has to have, say, a thesis, hyphotesis or new idea to be tested.
From my own experience as supervisor, when a Master or Ph G student has not yet a thesis, hypothesis, or new question to put forth or advance, s/he is not still prepared to carry out a Master or Pd H research. When I student comes to me and says that s/he wants me to supervise his/her Master or Ph D work I always asked them if they have a thesis to test and prove. This is, say, an irritating question to students. It is often the case that students tell me that they have not yet any thesis to test and pursue. If this is the case -- I reply- you are not yet prepared to write a dissertation and have a thesis to defend and test. So, you have to think a bit more about what you want to put forth and test.
In a nutshell, it makes sense to speak of a dissertation because students have to elaborate at a reasonable extent on the topic of their work. It makes sense to speak of a thesis because a dissertation without no thesis to argue for and test is no Master or Ph D dissertation at all.