diff --git a/homeassistant/auth/providers/trusted_networks.py b/homeassistant/auth/providers/trusted_networks.py
index bc995368fec..0cf79c3cc95 100644
--- a/homeassistant/auth/providers/trusted_networks.py
+++ b/homeassistant/auth/providers/trusted_networks.py
@@ -190,7 +190,7 @@ class TrustedNetworksLoginFlow(LoginFlow):
             ).async_validate_access(self._ip_address)
 
         except InvalidAuthError:
-            return self.async_abort(reason="not_whitelisted")
+            return self.async_abort(reason="not_allowed")
 
         if user_input is not None:
             return await self.async_finish(user_input)
diff --git a/homeassistant/components/file/sensor.py b/homeassistant/components/file/sensor.py
index 3f6d69325f0..e928541a724 100644
--- a/homeassistant/components/file/sensor.py
+++ b/homeassistant/components/file/sensor.py
@@ -40,7 +40,7 @@ async def async_setup_platform(hass, config, async_add_entities, discovery_info=
     if hass.config.is_allowed_path(file_path):
         async_add_entities([FileSensor(name, file_path, unit, value_template)], True)
     else:
-        _LOGGER.error("'%s' is not a whitelisted directory", file_path)
+        _LOGGER.error("'%s' is not an allowed directory", file_path)
 
 
 class FileSensor(Entity):
diff --git a/homeassistant/components/logi_circle/camera.py b/homeassistant/components/logi_circle/camera.py
index ec8f1595168..20bc829d75d 100644
--- a/homeassistant/components/logi_circle/camera.py
+++ b/homeassistant/components/logi_circle/camera.py
@@ -172,7 +172,7 @@ class LogiCam(Camera):
         filename.hass = self.hass
         stream_file = filename.async_render(variables={ATTR_ENTITY_ID: self.entity_id})
 
-        # Respect configured path whitelist.
+        # Respect configured allowed paths.
         if not self.hass.config.is_allowed_path(stream_file):
             _LOGGER.error("Can't write %s, no access to path!", stream_file)
             return
@@ -191,7 +191,7 @@ class LogiCam(Camera):
             variables={ATTR_ENTITY_ID: self.entity_id}
         )
 
-        # Respect configured path whitelist.
+        # Respect configured allowed paths.
         if not self.hass.config.is_allowed_path(snapshot_file):
             _LOGGER.error("Can't write %s, no access to path!", snapshot_file)
             return
diff --git a/homeassistant/components/watson_iot/__init__.py b/homeassistant/components/watson_iot/__init__.py
index b0500806b84..ecb546f4a8c 100644
--- a/homeassistant/components/watson_iot/__init__.py
+++ b/homeassistant/components/watson_iot/__init__.py
@@ -74,10 +74,10 @@ def setup(hass, config):
 
     include = conf[CONF_INCLUDE]
     exclude = conf[CONF_EXCLUDE]
-    whitelist_e = set(include[CONF_ENTITIES])
-    whitelist_d = set(include[CONF_DOMAINS])
-    blacklist_e = set(exclude[CONF_ENTITIES])
-    blacklist_d = set(exclude[CONF_DOMAINS])
+    include_e = set(include[CONF_ENTITIES])
+    include_d = set(include[CONF_DOMAINS])
+    exclude_e = set(exclude[CONF_ENTITIES])
+    exclude_d = set(exclude[CONF_DOMAINS])
 
     client_args = {
         "org": conf[CONF_ORG],
@@ -94,13 +94,13 @@ def setup(hass, config):
         if (
             state is None
             or state.state in (STATE_UNKNOWN, "", STATE_UNAVAILABLE)
-            or state.entity_id in blacklist_e
-            or state.domain in blacklist_d
+            or state.entity_id in exclude_e
+            or state.domain in exclude_d
         ):
             return
 
-        if (whitelist_e and state.entity_id not in whitelist_e) or (
-            whitelist_d and state.domain not in whitelist_d
+        if (include_e and state.entity_id not in include_e) or (
+            include_d and state.domain not in include_d
         ):
             return
 
diff --git a/homeassistant/components/xmpp/notify.py b/homeassistant/components/xmpp/notify.py
index 7388c11f70f..78dc3c43032 100644
--- a/homeassistant/components/xmpp/notify.py
+++ b/homeassistant/components/xmpp/notify.py
@@ -301,7 +301,7 @@ async def async_send_message(
             _LOGGER.info("Uploading file from path, %s", path)
 
             if not hass.config.is_allowed_path(path):
-                raise PermissionError("Could not access file. Not in whitelist")
+                raise PermissionError("Could not access file. Path not allowed")
 
             with open(path, "rb") as upfile:
                 _LOGGER.debug("Reading file %s", path)
diff --git a/homeassistant/config.py b/homeassistant/config.py
index 894d0bb5379..2ffa69b4ff2 100644
--- a/homeassistant/config.py
+++ b/homeassistant/config.py
@@ -20,6 +20,7 @@ from homeassistant.const import (
     ATTR_ASSUMED_STATE,
     ATTR_FRIENDLY_NAME,
     ATTR_HIDDEN,
+    CONF_ALLOWLIST_EXTERNAL_DIRS,
     CONF_ALLOWLIST_EXTERNAL_URLS,
     CONF_AUTH_MFA_MODULES,
     CONF_AUTH_PROVIDERS,
@@ -39,7 +40,7 @@ from homeassistant.const import (
     CONF_TYPE,
     CONF_UNIT_SYSTEM,
     CONF_UNIT_SYSTEM_IMPERIAL,
-    CONF_WHITELIST_EXTERNAL_DIRS,
+    LEGACY_CONF_WHITELIST_EXTERNAL_DIRS,
     TEMP_CELSIUS,
     __version__,
 )
@@ -183,7 +184,10 @@ CORE_CONFIG_SCHEMA = CUSTOMIZE_CONFIG_SCHEMA.extend(
         CONF_TIME_ZONE: cv.time_zone,
         vol.Optional(CONF_INTERNAL_URL): cv.url,
         vol.Optional(CONF_EXTERNAL_URL): cv.url,
-        vol.Optional(CONF_WHITELIST_EXTERNAL_DIRS): vol.All(
+        vol.Optional(CONF_ALLOWLIST_EXTERNAL_DIRS): vol.All(
+            cv.ensure_list, [vol.IsDir()]  # pylint: disable=no-value-for-parameter
+        ),
+        vol.Optional(LEGACY_CONF_WHITELIST_EXTERNAL_DIRS): vol.All(
             cv.ensure_list, [vol.IsDir()]  # pylint: disable=no-value-for-parameter
         ),
         vol.Optional(CONF_ALLOWLIST_EXTERNAL_URLS): vol.All(cv.ensure_list, [cv.url]),
@@ -500,9 +504,19 @@ async def async_process_ha_core_config(hass: HomeAssistant, config: Dict) -> Non
         hac.set_time_zone(config[CONF_TIME_ZONE])
 
     # Init whitelist external dir
-    hac.whitelist_external_dirs = {hass.config.path("www")}
-    if CONF_WHITELIST_EXTERNAL_DIRS in config:
-        hac.whitelist_external_dirs.update(set(config[CONF_WHITELIST_EXTERNAL_DIRS]))
+    hac.allowlist_external_dirs = {hass.config.path("www")}
+    if CONF_ALLOWLIST_EXTERNAL_DIRS in config:
+        hac.allowlist_external_dirs.update(set(config[CONF_ALLOWLIST_EXTERNAL_DIRS]))
+
+    elif LEGACY_CONF_WHITELIST_EXTERNAL_DIRS in config:
+        _LOGGER.warning(
+            "Key %s has been replaced with %s. Please update your config",
+            CONF_ALLOWLIST_EXTERNAL_DIRS,
+            LEGACY_CONF_WHITELIST_EXTERNAL_DIRS,
+        )
+        hac.allowlist_external_dirs.update(
+            set(config[LEGACY_CONF_WHITELIST_EXTERNAL_DIRS])
+        )
 
     # Init whitelist external URL list – make sure to add / to every URL that doesn't
     # already have it so that we can properly test "path ownership"
diff --git a/homeassistant/const.py b/homeassistant/const.py
index 0d19dc268c8..f3ed345682e 100644
--- a/homeassistant/const.py
+++ b/homeassistant/const.py
@@ -44,7 +44,6 @@ CONF_BASE = "base"
 CONF_BEFORE = "before"
 CONF_BELOW = "below"
 CONF_BINARY_SENSORS = "binary_sensors"
-CONF_BLACKLIST = "blacklist"
 CONF_BRIGHTNESS = "brightness"
 CONF_BROADCAST_ADDRESS = "broadcast_address"
 CONF_BROADCAST_PORT = "broadcast_port"
@@ -181,7 +180,8 @@ CONF_WEBHOOK_ID = "webhook_id"
 CONF_WEEKDAY = "weekday"
 CONF_WHILE = "while"
 CONF_WHITELIST = "whitelist"
-CONF_WHITELIST_EXTERNAL_DIRS = "whitelist_external_dirs"
+CONF_ALLOWLIST_EXTERNAL_DIRS = "allowlist_external_dirs"
+LEGACY_CONF_WHITELIST_EXTERNAL_DIRS = "whitelist_external_dirs"
 CONF_WHITE_VALUE = "white_value"
 CONF_XY = "xy"
 CONF_ZONE = "zone"
diff --git a/homeassistant/core.py b/homeassistant/core.py
index fe85e7e368c..fb6db49139d 100644
--- a/homeassistant/core.py
+++ b/homeassistant/core.py
@@ -1320,7 +1320,7 @@ class Config:
         self.config_dir: Optional[str] = None
 
         # List of allowed external dirs to access
-        self.whitelist_external_dirs: Set[str] = set()
+        self.allowlist_external_dirs: Set[str] = set()
 
         # List of allowed external URLs that integrations may use
         self.allowlist_external_urls: Set[str] = set()
@@ -1370,9 +1370,9 @@ class Config:
         except (FileNotFoundError, RuntimeError, PermissionError):
             return False
 
-        for whitelisted_path in self.whitelist_external_dirs:
+        for allowed_path in self.allowlist_external_dirs:
             try:
-                thepath.relative_to(whitelisted_path)
+                thepath.relative_to(allowed_path)
                 return True
             except ValueError:
                 pass
@@ -1397,7 +1397,9 @@ class Config:
             "time_zone": time_zone,
             "components": self.components,
             "config_dir": self.config_dir,
-            "whitelist_external_dirs": self.whitelist_external_dirs,
+            # legacy, backwards compat
+            "whitelist_external_dirs": self.allowlist_external_dirs,
+            "allowlist_external_dirs": self.allowlist_external_dirs,
             "allowlist_external_urls": self.allowlist_external_urls,
             "version": __version__,
             "config_source": self.config_source,
diff --git a/tests/auth/providers/test_trusted_networks.py b/tests/auth/providers/test_trusted_networks.py
index 4baa9d8da00..3156c40f876 100644
--- a/tests/auth/providers/test_trusted_networks.py
+++ b/tests/auth/providers/test_trusted_networks.py
@@ -151,7 +151,7 @@ async def test_login_flow(manager, provider):
     flow = await provider.async_login_flow({"ip_address": ip_address("127.0.0.1")})
     step = await flow.async_step_init()
     assert step["type"] == "abort"
-    assert step["reason"] == "not_whitelisted"
+    assert step["reason"] == "not_allowed"
 
     # from trusted network, list users
     flow = await provider.async_login_flow({"ip_address": ip_address("192.168.0.1")})
@@ -190,7 +190,7 @@ async def test_trusted_users_login(manager_with_user, provider_with_user):
     )
     step = await flow.async_step_init()
     assert step["type"] == "abort"
-    assert step["reason"] == "not_whitelisted"
+    assert step["reason"] == "not_allowed"
 
     # from trusted network, list users intersect trusted_users
     flow = await provider_with_user.async_login_flow(
@@ -274,7 +274,7 @@ async def test_trusted_group_login(manager_with_user, provider_with_user):
     )
     step = await flow.async_step_init()
     assert step["type"] == "abort"
-    assert step["reason"] == "not_whitelisted"
+    assert step["reason"] == "not_allowed"
 
     # from trusted network, list users intersect trusted_users
     flow = await provider_with_user.async_login_flow(
@@ -313,7 +313,7 @@ async def test_bypass_login_flow(manager_bypass_login, provider_bypass_login):
     )
     step = await flow.async_step_init()
     assert step["type"] == "abort"
-    assert step["reason"] == "not_whitelisted"
+    assert step["reason"] == "not_allowed"
 
     # from trusted network, only one available user, bypass the login flow
     flow = await provider_bypass_login.async_login_flow(
diff --git a/tests/components/api/test_init.py b/tests/components/api/test_init.py
index 24a1532dead..e54af925dec 100644
--- a/tests/components/api/test_init.py
+++ b/tests/components/api/test_init.py
@@ -212,6 +212,8 @@ async def test_api_get_config(hass, mock_api_client):
         result["components"] = set(result["components"])
     if "whitelist_external_dirs" in result:
         result["whitelist_external_dirs"] = set(result["whitelist_external_dirs"])
+    if "allowlist_external_dirs" in result:
+        result["allowlist_external_dirs"] = set(result["allowlist_external_dirs"])
     if "allowlist_external_urls" in result:
         result["allowlist_external_urls"] = set(result["allowlist_external_urls"])
 
diff --git a/tests/components/filesize/test_sensor.py b/tests/components/filesize/test_sensor.py
index 11709296375..6d35ab0d88e 100644
--- a/tests/components/filesize/test_sensor.py
+++ b/tests/components/filesize/test_sensor.py
@@ -23,7 +23,7 @@ class TestFileSensor(unittest.TestCase):
     def setup_method(self, method):
         """Set up things to be run when tests are started."""
         self.hass = get_test_home_assistant()
-        self.hass.config.whitelist_external_dirs = {TEST_DIR}
+        self.hass.config.allowlist_external_dirs = {TEST_DIR}
 
     def teardown_method(self, method):
         """Stop everything that was started."""
diff --git a/tests/components/folder/test_sensor.py b/tests/components/folder/test_sensor.py
index 9578eadc915..72185d4eda3 100644
--- a/tests/components/folder/test_sensor.py
+++ b/tests/components/folder/test_sensor.py
@@ -28,7 +28,7 @@ class TestFolderSensor(unittest.TestCase):
         self.hass = get_test_home_assistant()
         if not os.path.isdir(TEST_DIR):
             os.mkdir(TEST_DIR)
-        self.hass.config.whitelist_external_dirs = {TEST_DIR}
+        self.hass.config.allowlist_external_dirs = {TEST_DIR}
 
     def teardown_method(self, method):
         """Stop everything that was started."""
diff --git a/tests/components/folder_watcher/test_init.py b/tests/components/folder_watcher/test_init.py
index 997bac23f22..1123a5907fb 100644
--- a/tests/components/folder_watcher/test_init.py
+++ b/tests/components/folder_watcher/test_init.py
@@ -19,7 +19,7 @@ async def test_invalid_path_setup(hass):
 async def test_valid_path_setup(hass):
     """Test that a valid path is setup."""
     cwd = os.path.join(os.path.dirname(__file__))
-    hass.config.whitelist_external_dirs = {cwd}
+    hass.config.allowlist_external_dirs = {cwd}
     with patch.object(folder_watcher, "Watcher"):
         assert await async_setup_component(
             hass,
diff --git a/tests/components/history/test_init.py b/tests/components/history/test_init.py
index 56318f3e9fb..b50ea339683 100644
--- a/tests/components/history/test_init.py
+++ b/tests/components/history/test_init.py
@@ -730,7 +730,7 @@ class TestComponentHistory(unittest.TestCase):
         ):
             # This state will be skipped only different in time
             set_state(mp, "YouTube", attributes={"media_title": str(sentinel.mt3)})
-            # This state will be skipped because domain blacklisted
+            # This state will be skipped because domain is excluded
             set_state(zone, "zoning")
             set_state(script_nc, "off")
             states[script_c].append(
diff --git a/tests/components/influxdb/test_init.py b/tests/components/influxdb/test_init.py
index d9b41ed967c..02a98a527ac 100644
--- a/tests/components/influxdb/test_init.py
+++ b/tests/components/influxdb/test_init.py
@@ -188,7 +188,7 @@ async def _setup(hass, mock_influx_client, config_ext, get_write_api):
     config = {
         "influxdb": {
             "host": "host",
-            "exclude": {"entities": ["fake.blacklisted"], "domains": ["another_fake"]},
+            "exclude": {"entities": ["fake.excluded"], "domains": ["another_fake"]},
         }
     }
     config["influxdb"].update(config_ext)
diff --git a/tests/components/minio/test_minio.py b/tests/components/minio/test_minio.py
index 88f7418d2d4..8cde32f7870 100644
--- a/tests/components/minio/test_minio.py
+++ b/tests/components/minio/test_minio.py
@@ -54,7 +54,7 @@ def minio_client_event_fixture():
 
 async def test_minio_services(hass, caplog, minio_client):
     """Test Minio services."""
-    hass.config.whitelist_external_dirs = set("/test")
+    hass.config.allowlist_external_dirs = {"/test"}
 
     await async_setup_component(
         hass,
diff --git a/tests/components/mobile_app/test_webhook.py b/tests/components/mobile_app/test_webhook.py
index 790ebc56bf6..195c60d830c 100644
--- a/tests/components/mobile_app/test_webhook.py
+++ b/tests/components/mobile_app/test_webhook.py
@@ -171,8 +171,8 @@ async def test_webhook_handle_get_config(hass, create_registrations, webhook_cli
     json = await resp.json()
     if "components" in json:
         json["components"] = set(json["components"])
-    if "whitelist_external_dirs" in json:
-        json["whitelist_external_dirs"] = set(json["whitelist_external_dirs"])
+    if "allowlist_external_dirs" in json:
+        json["allowlist_external_dirs"] = set(json["allowlist_external_dirs"])
 
     hass_config = hass.config.as_dict()
 
diff --git a/tests/components/owntracks/test_device_tracker.py b/tests/components/owntracks/test_device_tracker.py
index 7f066346d5a..9f47c63aa85 100644
--- a/tests/components/owntracks/test_device_tracker.py
+++ b/tests/components/owntracks/test_device_tracker.py
@@ -1228,8 +1228,8 @@ async def test_waypoint_import_simple(hass, context):
     assert wayp is not None
 
 
-async def test_waypoint_import_blacklist(hass, context):
-    """Test import of list of waypoints for blacklisted user."""
+async def test_waypoint_import_block(hass, context):
+    """Test import of list of waypoints for blocked user."""
     waypoints_message = WAYPOINTS_EXPORTED_MESSAGE.copy()
     await send_message(hass, WAYPOINTS_TOPIC_BLOCKED, waypoints_message)
     # Check if it made it into states
diff --git a/tests/components/websocket_api/test_commands.py b/tests/components/websocket_api/test_commands.py
index 6f7b288f292..57724fb54c6 100644
--- a/tests/components/websocket_api/test_commands.py
+++ b/tests/components/websocket_api/test_commands.py
@@ -234,6 +234,10 @@ async def test_get_config(hass, websocket_client):
         msg["result"]["whitelist_external_dirs"] = set(
             msg["result"]["whitelist_external_dirs"]
         )
+    if "allowlist_external_dirs" in msg["result"]:
+        msg["result"]["allowlist_external_dirs"] = set(
+            msg["result"]["allowlist_external_dirs"]
+        )
     if "allowlist_external_urls" in msg["result"]:
         msg["result"]["allowlist_external_urls"] = set(
             msg["result"]["allowlist_external_urls"]
diff --git a/tests/test_config.py b/tests/test_config.py
index c27ebb2b6e8..22b5987f69c 100644
--- a/tests/test_config.py
+++ b/tests/test_config.py
@@ -353,7 +353,7 @@ async def test_loading_configuration_from_storage(hass, hass_storage):
         "version": 1,
     }
     await config_util.async_process_ha_core_config(
-        hass, {"whitelist_external_dirs": "/etc"}
+        hass, {"allowlist_external_dirs": "/etc"}
     )
 
     assert hass.config.latitude == 55
@@ -364,8 +364,8 @@ async def test_loading_configuration_from_storage(hass, hass_storage):
     assert hass.config.time_zone.zone == "Europe/Copenhagen"
     assert hass.config.external_url == "https://www.example.com"
     assert hass.config.internal_url == "http://example.local"
-    assert len(hass.config.whitelist_external_dirs) == 2
-    assert "/etc" in hass.config.whitelist_external_dirs
+    assert len(hass.config.allowlist_external_dirs) == 2
+    assert "/etc" in hass.config.allowlist_external_dirs
     assert hass.config.config_source == SOURCE_STORAGE
 
 
@@ -387,7 +387,7 @@ async def test_updating_configuration(hass, hass_storage):
     }
     hass_storage["core.config"] = dict(core_data)
     await config_util.async_process_ha_core_config(
-        hass, {"whitelist_external_dirs": "/etc"}
+        hass, {"allowlist_external_dirs": "/etc"}
     )
     await hass.config.async_update(latitude=50)
 
@@ -412,7 +412,7 @@ async def test_override_stored_configuration(hass, hass_storage):
         "version": 1,
     }
     await config_util.async_process_ha_core_config(
-        hass, {"latitude": 60, "whitelist_external_dirs": "/etc"}
+        hass, {"latitude": 60, "allowlist_external_dirs": "/etc"}
     )
 
     assert hass.config.latitude == 60
@@ -421,8 +421,8 @@ async def test_override_stored_configuration(hass, hass_storage):
     assert hass.config.location_name == "Home"
     assert hass.config.units.name == CONF_UNIT_SYSTEM_METRIC
     assert hass.config.time_zone.zone == "Europe/Copenhagen"
-    assert len(hass.config.whitelist_external_dirs) == 2
-    assert "/etc" in hass.config.whitelist_external_dirs
+    assert len(hass.config.allowlist_external_dirs) == 2
+    assert "/etc" in hass.config.allowlist_external_dirs
     assert hass.config.config_source == config_util.SOURCE_YAML
 
 
@@ -437,7 +437,7 @@ async def test_loading_configuration(hass):
             "name": "Huis",
             CONF_UNIT_SYSTEM: CONF_UNIT_SYSTEM_IMPERIAL,
             "time_zone": "America/New_York",
-            "whitelist_external_dirs": "/etc",
+            "allowlist_external_dirs": "/etc",
             "external_url": "https://www.example.com",
             "internal_url": "http://example.local",
         },
@@ -451,8 +451,8 @@ async def test_loading_configuration(hass):
     assert hass.config.time_zone.zone == "America/New_York"
     assert hass.config.external_url == "https://www.example.com"
     assert hass.config.internal_url == "http://example.local"
-    assert len(hass.config.whitelist_external_dirs) == 2
-    assert "/etc" in hass.config.whitelist_external_dirs
+    assert len(hass.config.allowlist_external_dirs) == 2
+    assert "/etc" in hass.config.allowlist_external_dirs
     assert hass.config.config_source == config_util.SOURCE_YAML
 
 
diff --git a/tests/test_core.py b/tests/test_core.py
index ffd3dad66f8..884c5e98125 100644
--- a/tests/test_core.py
+++ b/tests/test_core.py
@@ -915,6 +915,7 @@ class TestConfig(unittest.TestCase):
             "components": set(),
             "config_dir": "/test/ha-config",
             "whitelist_external_dirs": set(),
+            "allowlist_external_dirs": set(),
             "allowlist_external_urls": set(),
             "version": __version__,
             "config_source": "default",
@@ -931,7 +932,7 @@ class TestConfig(unittest.TestCase):
         with TemporaryDirectory() as tmp_dir:
             # The created dir is in /tmp. This is a symlink on OS X
             # causing this test to fail unless we resolve path first.
-            self.config.whitelist_external_dirs = {os.path.realpath(tmp_dir)}
+            self.config.allowlist_external_dirs = {os.path.realpath(tmp_dir)}
 
             test_file = os.path.join(tmp_dir, "test.jpg")
             with open(test_file, "w") as tmp_file:
@@ -941,7 +942,7 @@ class TestConfig(unittest.TestCase):
             for path in valid:
                 assert self.config.is_allowed_path(path)
 
-            self.config.whitelist_external_dirs = {"/home", "/var"}
+            self.config.allowlist_external_dirs = {"/home", "/var"}
 
             unvalid = [
                 "/hass/config/secure",