I prefer mistery and simplification:
The Orb of Power - It contains the Power of the Universe and also the souls of King Grayskull, He-Ro and other powerful members from the Grayskull family.
The Sword of Power - Gives a descendant of the Grayskull family access to the Universe power and all the knowledge of his / her ancestors. Anyone who touch the sword can get the power of the Universe, but not the Graykull knowledge.
This explains why so many people want to get the power of the sword, but only Adam, the true heir of the Grayskull power and knowledge can transforms in He-man
Castle Grayskull - Keeps inside the Orb of Power and other powerful weapons and knowledge from the Grayskull family.