I think that, in most sword & sorcery worlds, the average person will not use the term "Magic-User" too much; indeed, I am not even sure if a typical commoner will know the difference between a Magic-User and certain kinds of Clerics. In fact, in my City on the Ice-Choked Sea campaign, some Clerics (those of the Old Faith) will be considered Witches by the New Faith and many of its lay followers; on the other hand, the priests of various esoteric faiths - such as nature worship, "demon" worship and Fey worship would be, in game terms, Magic-Users.
The average commoner in the City knows, of course, that magic - both Lawful and Chaotic - exists, and that otherworldly beings exist as well. However, magic, particularly high-level, is uncommon, and not everyone has actually seen a spell cast in their lives. So misconceptions, both intentional and unintentional, abound.
To the ignorant peasant in the countryside does not know much about the difference between a low-level Fey-related Magic-User and a low-level priestess of the Old Faith. Both will be either called Witches and feared, or called Wise Women or Hedge Wizards and relied upon for spiritual help, depending on their relations with the locals. None will have, in most cases, much magical power, but a few weak spells here and there will be enough to give them a reputation.
Well-off City-dwelling Magic-Users usually fancy themselves to be Scientists, Renaissance Men, Doctors, or, for the very least, Scholars or Alchemists; many actually hold academic degrees from the University of Zagadur or other, foreign, universities. Others, less affluent, would be known as sooth-sayers, fortune-tellers and the like in the Market District and the slums.
The Old Faith priestesses tend to be quite reclusive in these days for the fear of prosecution, and are far more common in the deeper, wilder countryside than in the City. They rarely advertise their worship any more, but rather carry it in the shadow of forests and mountains (or the City's sewers), and sometimes perform the duty of a Midwife or Wise Woman of a village or a slum.
The New Faith sees, in theory, all magic-using characters who are not Clergy as Witches, Heretics or far, far worse. In practice, except for the most fanatical sects, the New Faith begrudgingly accepts the existence of the more well-respected urban Magic-Users as a necessary evil which could be contained but cannot truly be eradicated.