Purple Foxx, In that paragraph from the historical preface Fred is talking about the popular reception to the words communism and socialism at different times. Engels himself wrote a book called Socialism:utopian and scientific, advocating the latter against the leagues of religious obscurantists and utopians (blueprint formers) that called themselves socialists.

As I understand it Marx and Engels began to drop the use of the word socialism in their later days for the reasons he describes.