An armada's flotillas (that is, its flagships) don't contribute directly to its power. The power numbers include only the squadrons aboard the flagships. So if those armadas have taken horrendous losses and not been back at their own planets long enough to have their squadrons rebuilt then they're much less effective.
I agree that just calling it "armadas", "flagships", and "squadrons" would probably be clearer than the current approach. I also think that having flagships be consistently counted as 10 squadrons for power computations (they are semi-counted that way in certain contexts) would make more sense. But that stuff is up to Chris