All food is processed unless one is eating it raw, and even then, if a vegetable is cut or sliced, one could still reasonably call it "processed." The word "processed" simply means that a set of actions were taken to alter a food in some way. It shouldn't mean that food is bad! For example, for as many industrial processes propelling the gears of our economy, there are just as many natural and domestic process operating in our bodies, homes, and ecosystems. Nevertheless, "processed" has become associated with the host of artificial and potentially dangerous measures used to preserve and manufacture food on an industrial scale. In reality, this food is no more processed than a home-made casserole using locally grown ingredients. How it differs is that it is "industrialized" or as some people used to call it "embalmed." I think these two words capture the reality of what we typically called "processed" food more so than that intentionally sterile world.
The history of the term "processed food" dates back to 1913 and the roots of industrialized cheese manufacturing in the United States. Small scale, artisnal cheese producers asked the Feds to label industrialized cheese "embalmed" cheese as the processes used to create industrialized cheese killed the living bacteria that makes artisinal cheese the rich and diverse product that it remains today. But the industrialized cheese lobby won it's bid for the term "processed cheese" instead. Since then, all industrialized foods have come to be known as "processed." (Further reading here.)
In a commitment to removing some of the Orwellian overtones of food production today, I suggest we all begin by calling processed food "indsutrialized" or, in the case of cheese "embalmed." Think about it: it's a lot harder to sell embalmed food than it is to sell processed.