The powder is an American invention as a shortcut to taste and some heat in making chilis; Mexicans don’t really use it. Despite its name, it is actually very, very mild. Many people feel that for all the taste and heat it is going to give your food, you might as well just sprinkle paprika or red sawdust on your food.
It is spelled Chili Powder, with chili having an “i” at the end, and legitimately so, as it is often used in making chilis.
Better blends can be made yourself from various dried chiles to provide the right notes of heat and taste, with the addition of, for the real purist, Mexican oregano.
Chile Powder is made from chiles only that have been dried and ground into a powder. No additional spices are added to the powder itself.
Many connoisseurs make their own pure chile powder. Chipotle powder provides nice smoky notes, as well as more zip than commercial Chile Powders.