According to the GPC (Geiriadur Prifysgol Cymru) Cawl: soup; pottage;broth; gruel fig. mixture, hotpotch, mess.
Yn ôl gweiadur.com: soup; broth; mess
Geiriadur yr Academi gives "Cawl" as a translation for "Stew", with various phrases using "cawl" being translated as stew.
I've certainly seen it for "stew" in at least one book.
Okay, I think you're confusing using one word in two languages and actually translating.
Cawl, the Welsh word means soup or broth. The English borrowing cawl means "traditional Welsh soup". (By the way traditional Welsh cawl isn't made with lamb, but bacon, lamb is a very recent thing.)
So the Welsh word cawl does not, therefore, translate as English "cawl" because the Welsh word is more general, and the English word is borrowed from Welsh to mean Welsh-soup. It's a habit of English to borrow foreign words and pretty much use it to stereotype.
I see what you're saying, but I (as a Welsh person, from the valleys) would say Cawl is Cawl, not Soup. Maybe this is an English language influence, however, I feel that it use in this manner is substantially popular enough that it warrants accepting Cawl as a possible translation anyway. Nice point about the bacon too, very interesting! I hadn't realised that it was traditionally any different from the way my grandmother used to make it.