What is the difference between the compounds fe2o3 and feo? why are they not both called simply iron oxide?

There is a big different. Iron (Fe) is a transitional metal. these type of metals are known to have different "versions" of the same element with different charges. Iron has two ions, Fe+2 and Fe+3. so the molecular formula varies depending on which iron ion you have. 

Oxygen is a nonmetal and it will always have the same charge, -2. 

remember that when you put two atoms together, you "cross" the charges and put them as a suffix. I have attached a picture as a visual aid of how to do this.

so, if you put together Fe+2 and oxygen you can get Fe2O2, which simplifies to FeO since the have the same suffix.this compound is called Iron (II) oxide because the iron is the one with charge +2.

so, if you put together Fe+3 and oxygen you can get Fe2O3. this compound is called Iron (III) oxide because the iron is the one with charge +3.