Outliners represent a particular version of nesting, where "nesting" means that we place one thing "under" or "in" something else. You can also say that it nests lists under other lists. There is a hierarchical relationship. Usually one nests the simple in the complex or the particular under the general (though one may also take the reverse approach. In any case, a "parent" can have "child," and a child can have a grandchild, but the grandchild cannot in turn become the parent. There is always a "root" and you can think of this classification scheme as a "tree."
Brainstorm is a simple nesting or list editor, for instance. It allows you to look at a particular list without worrying about the list that comes before and after. But every list has a definite place in a hierarchy of lists. Brainstorm has "namesakes." Namesakes are any entries in a BrainStorm model with identical text. They are created automatically but you can disconnect them if you want to. They enable you to see when you've already entered or pasted something. This allows you to have the same information at different levels of the lists, but it is a rather limited way of circumventing the hierarchical structure.
A true outliner is even more hierarchical. It is a system of nested groups. Hierarchies are good because they group related things. A collapsible outliner is useful because it allows you to hide as much or as little of the gory details as you want But, and this is important, traversing from one point in the hierarchy to another must always move through a common node or root, and this route can be very long in a complicated outline.
A wiki represents a network. In a network there need not be a root (though you can, if you want) create a hierarchical network as well. Any point or node of the network can be connected to any other. A parent can thus be also the and at the same time the child. There is no direction, unless you restrict yourself and impose one. In any case, what makes the wiki interesting is that it is not a tree (and not an outline).
So you could say that a wiki (or network) can take a hierarchical structure, but you cannot say that a hierarchical structure can be, insofar as it is a hierarchical structure, is a wiki or a network. That is why outliners are usually opposed to networks. And that is why I think it is nonsense to speak of Word's Outliner as a "nested wiki."
See also Hierarchies and Nets and Outlines and Hypertext.
To say it again, I have nothing against hierarchical outliners and I think it is wrong to think that it forces us into "hierarchical thinking," but I see no advantage to confuse two things that should be kept separate. I should also say that I do not want to claim that the fact that I do not like MS-Word's outliner has any strong normative force. so, if you like Word's, and if you do not need a wiki that's fine with me. Just don't call it a wiki because it fulfills the same function for you, for which others use a wiki.
1. I like outliners. I also know that some of the better outliners try to incorporate network-like capabilities. It's just that MS-Word's outliner does not do this in any way whatsoever. That MS-Word also allows you to include links to other files and thus to mimic rudimentary wiki-like capabilities in this way is true, but it is also a rather different matter from collapsible outlines.