Alow me to help you out,KinopioToad. Toad is, indeed, a character in and of himself, but Mushroom People are also called Toads. Find this hard to understand? Well, look at Yoshis!
There is ONE "Yoshi," but he is one of many Yoshis. Likewise, Toad is one of many Mushroom People, also called Toads. It'd be like somebody being named Human. There'd be one "Human," but he'd be one of many Humans. Get it? Kinda sorta maybe?
Let us never forget that Toad and Yoshi are specific characters, not just a toad or a yoshi.
Hope that helped.