Let $A \subset X$, then $A$ is said to be relatively compact if the closure $cl(A)$ is compact in $X$. Why is this called relatively here when it is "relative" to the universal space $X$?
Shouldn't relative compactness mean $A \subset E \subset X$ is relatively compact if $A = E \cap C$ for $C$ compact in $X$.
A set of the form $C \cap E$ where $C$ is compact in $X$ is relatively compact in $E$ (when $X$ is Hausdorff), as $\operatorname{cl}(C \cap E) \subseteq C$ and so is a closed subset of a compact set, hence compact.
If $\operatorname{cl}(A)$ is compact, then we cannot always find such a $C$ with $E \cap C= A$, as that would make $A$ closed in $E$ (again for Hausdorff spaces), and non-relatively-closed sets can also be relatively compact.
So defining relatively compact as you suggests creates a weaker, less useful notion.