[iamconfused]

This is my understanding.

You start with a hypothesis with no assumption of truth. Using that hypothesis you make a prediction and then use observation to test your prediction. During your observation you may find proof that your prediction was correct, which in turn provides support for your hypothesis. Once sufficient evidence is found for a hypothesis, it becomes a theory.

[nonbel]

I'd say you have a theory from which you deduce a model that consists of various assumptions plus a hypothesis. If this hypothesis has not yet been compared to a set of observations, then it is also a prediction about that set of observations.

Also, the distinction between assumption and hypothesis is subjective, it depends what aspect of the phenomenon you care about at that time. Another term for assumption could be "auxiliary hypothesis".

Proof refers to the set of logical deductions (from theory + assumptions) that lead to the model, it has nothing to do with the observations.

[iamconfused]

It's important not to confuse theory with scientific theory. They have very different meanings. In everyday speech a theory is roughly equivalent to a guess. In science, a theory is a well tested explanation of some phenomenon.

It's always hypothesis then theory. Your hypothesis may be based on other theories, but it is itself not a theory.

From Wikipedia: "The scientific method involves the proposal and testing of hypotheses, by deriving predictions from the hypotheses about the results of future experiments, then performing those experiments to see whether the predictions are valid. This provides evidence either for or against the hypothesis. When enough experimental results have been gathered in a particular area of inquiry, scientists may propose an explanatory framework that accounts for as many of these as possible. This explanation is also tested, and if it fulfills the necessary criteria (see above), then the explanation becomes a theory. This can take many years, as it can be difficult or complicated to gather sufficient evidence."