"Defund" is being used accurately. The movement is about reducing the budgets of police forces. Now, you could say that there's more to it that's being lost in the word "defund," which is true, but "Start a review and overhaul of how we address public safety and reduce both the scope of police work and the number of police while we put more money into revitalizing neglected communities, more social workers who know how to connect with people and other measures that might better reduce crime rates" doesn't fit on a sign, nor is it an efficient rallying cry. It's better as the preamble for a website or policy paper. No single word is going to describe everything going on in a complicated issue, but "defund" isn't being used incorrectly.
Anyone who actually cares to consider the issue in a good faith way will look into why and how people want to defund the police. Anyone who doesn't want to consider it in a good faith way will just keep saying "Sure, get rid of all the police and watch crime rates skyrocket."