Why is # called pound?

The pound sign derives from the capital L written in cursive script, with one or two horizontal bars bisecting it to indicate it is an abbreviation. The symbol derives from capital "L", standing for libra, the basic Roman unit of weight, which is in turn derived from the Latin libre meaning scales or a balance. (We know this also in Libra, the astrological sign that is represented by scales.) A pound of silver was the standard on which the monetary unit was based

The pound sign ("£" or "₤") is the symbol for the pound sterling—the currency of the United Kingdom (UK). and is used for similarly named currencies in some other countries and territories.In English-language use, the pound sign is placed before the number (£2 not  2£).

The symbol "₤" is also known as the lira sign. In Italy, prior to the adoption of the euro, the symbol was used as an alternative to the more usual L to indicate prices in lire (but always with double horizontal lines).

However, in the U.S.A. when the # symbol follows a number, it is read as "pounds" referring to the unit of weight, as in "5# of sugar" ("five pounds of sugar"). When # precedes a number, it is read as "number", as in "a #2 pencil" ("a number two pencil").

The symbol is more frequently referred to as the pound sign, but is also known as the number sign.

Why the confusing usage?

There have been a series of abbreviations for pound, the unit of weight. At first "lb." was used; however, printers later designed a font containing a special symbol of an "lb" with a line through the verticals so that the lowercase letter L "l" would not be mistaken for the numeral/digit "1". The symbol ℔ is called the "L B Bar Symbol", and it is a cursive development of this symbol. Ultimately, the symbol was reduced for clarity as an overlay of two horizontal strokes "=" across two forward-slash-like strokes "//" or the familiar # symbol.

Americans are used to referring to the # as the pound key in reference to the telephone keys, since saying "Press the number key" would be confusing - Which number key?

In the UK, the symbol is most often called the hash symbol or hash sign and it is rarely used in the UK to designate a number like in North America. It is never used to refer to pounds as a unit of weight (lb is commonly used for this). Furthermore, it is never called the pound sign since the term "pound sign" is understood to mean the currency symbol, £, for pound sterling.

Is that clear? Then let's make it a bit more confusing by adding the use of the # symbol on services such as Twitter where they are known as "hash tags."

A Twitter search for #nj will turn up tweets that as marked as being about New Jersey. Hash tags show up as the "trending topics" on Twitter's home page and are often created for events becoming "micro-memes" for attendees and interested parties. For example, the hash tag #SXSW would turn up posts related to the South by Southwest festivals.