I am confused why inventory items are displayed in both qty owned and qty on hand
These different quantities appear because you have enabled the Goods Receipts and/or Delivery Notes tabs. Quantity owned reflects the inventory you have purchased less that you have sold. It does not matter whether you have yet received the items or shipped them. Quantity owned represents those that you actually own. For a complete discussion of inventory management, read the three-part Guide beginning here: Manage inventory - Part 1 Introduction | Manager.