The Republicans in USA are said to be conservative. When I was in India, I thought they were conservative in a religious way. Or, they were conservatives in their social life. It was too easy to stereotype the Republicans in this way, given their stance against stem-cell research, evolution, gay rights, etc.
However, now that I am in the US and more exposed to US media, I have learned that the Republicans are called conservatives because they are supposed to be conservative economically--they support smaller government, lower taxes, free market, etc. Since US tries to follow the dictum of separation of Church and State, conservatism in the political arena implicitly refers to economic conservatism--there is no scope for religious/social conservatism in governmental context.
However, most of the prominent figures in the Republican party at present seem to take their conservatism beyond the constitution mandated economic level--which leads to the term neo-cons. The economic and fiscal policies of the current Republican administration, however, do not seem to follow the economic conservatism the party is supposed to stand for. The Tories in UK are conservatives in a similar way.
I was confused as to what the term 'conservative' meant. I hope this post will help someone similarly confused if one stumbles upon it. This post is not meant to be judgemental, and I do not draw any conclusions whatsoever. However, as disclosures go, I am a conservative economically and not in a socio-religious sense. Hence, I prefer the label libertarian to dispel any confusion. My religious leanings are a topic for another post.