Why is nurses cornflour allowed to use the name when it is made of wheat?

Cornflour is the name given in Australia to the starch component of milled grains. Despite its name, it is often made from wheat. The whole ground grain is processed to remove most of the proteins (mainly gluten), leaving almost pure starch.

This lack of protein, and the way it gelatinises, are the two main characteristics of Cornflour, which make it useful in cooking.

Gelatinisation: When Cornflour and water are heated (between 62-70°C), the starch absorbs water: The starch granules (which contain tightly arranged molecules of starch) weaken as the heat rises, allowing water to enter the granule and bond with the starch molecules. The sauce mixture becomes clear and glossy, and it thickens or becomes more viscous, depending on the concentration. This thickening happens because there is less free water in the sauce. When the mixture subsequently cools, the starch molecules will reassociate, trapping water within their network and forming a gel.

This gives you two characteristics: thickening and the ability to form a gel. The thickening power is widely made use of in sauces, gravies, etc. The gel aspect was once used in making puddings such as blancmange etc. but is now out of date.

The lack of protein is also why Cornflour can be used to substitute part of the flour in baking. It is the protein that stretches and then sets when heated, trapping air bubbles in cake mixtures. So if you have less, you will get a tenderer product. But too much can make the product seem sticky in the mouth.