I've been searching for an accurate answer to what each of these does but there seems to be so much incorrect information on the internet. I've tried as best as I could to get an understanding but I'm hoping other people will know more or can say where I'm right or wrong?
For the purposes of this thread I'll define what I mean by "Location", "Location Reporting" and "Location History" and what I gather each does.

"Location" - That do-all toggle at the top. That is what controls anything on the device being able to access location information (either GPS, WiFi or Cell - at least in high accuracy mode like I have). So on an app can have that information. Off an app can't.
"Location Reporting" and "Location History" under KitKat are in the Google Location Reporting part. Other devices you most likely have to go into the Google Settings app to access them.

"Location Reporting"
"Location History"
To give an example of the prevalent bit of misinformation - over at Lifehacker they make this statement.
This appears to just be plain wrong. They're confusing "Location Reporting" with "Location". With both "Location Reporting" & "Location History" turned off I can check in with FaceBook, see satellites in GPS Essentials, Android Device Manager locates me just fine and heck I can even open up Google Maps and locate myself and even use Navigation perfectly fine. Google Location Services is just another app that makes use of "Location".
So do I have the right idea of it? "Location Reporting" is just a service that in that background uses "Location" to give Google your current location.
Also I'm struggling to figure out what I lose by disabling "Location Reporting"? So long as I'm not using Google Now which appears to be the only thing that really makes use of it. I imagine it benefits Google with live traffic information and where I am but (again outside of Google Now) does anyone know of anything else disabling it can actually impact?
For the purposes of this thread I'll define what I mean by "Location", "Location Reporting" and "Location History" and what I gather each does.

"Location" - That do-all toggle at the top. That is what controls anything on the device being able to access location information (either GPS, WiFi or Cell - at least in high accuracy mode like I have). So on an app can have that information. Off an app can't.
"Location Reporting" and "Location History" under KitKat are in the Google Location Reporting part. Other devices you most likely have to go into the Google Settings app to access them.

"Location Reporting"
So from this it seems what this setting does is, in the background, let specifically Google know where you are.Google uses this feature in products like Google Now and Google Maps. Turning on Location Reporting lets any Google product that uses this feature store and use your device's most recent location data in connection with your Google account.
"Location History"
So what this setting does is just store each bit of information that "Location Reporting" sends to Google.This setting allows Google to store a history of your location data from devices where you have enabled Location Reporting for this account. Location History helps you get more out of Google - for example, Google Now may use it to notify you about traffic on your commute. You can view and manage your Location history at http://maps.google.com/locationhistory . You can turn off Location History at any point, but doing so will not remove existing entries...
To give an example of the prevalent bit of misinformation - over at Lifehacker they make this statement.
Location Reporting is the feature that gives apps like Google Now, Google Maps, Foursquare, Twitter, and even your camera app access to your position. Whenever an app shows you something nearby, suggests local businesses, or helps you find the closest gas station, it's using Location Reporting.
This appears to just be plain wrong. They're confusing "Location Reporting" with "Location". With both "Location Reporting" & "Location History" turned off I can check in with FaceBook, see satellites in GPS Essentials, Android Device Manager locates me just fine and heck I can even open up Google Maps and locate myself and even use Navigation perfectly fine. Google Location Services is just another app that makes use of "Location".
So do I have the right idea of it? "Location Reporting" is just a service that in that background uses "Location" to give Google your current location.
Also I'm struggling to figure out what I lose by disabling "Location Reporting"? So long as I'm not using Google Now which appears to be the only thing that really makes use of it. I imagine it benefits Google with live traffic information and where I am but (again outside of Google Now) does anyone know of anything else disabling it can actually impact?