We need be careful not to conflate degrees with fields. Psychiatrists can and do engage in "doctoring," psychological testing, therapy, analysis, etc. Clinician psychologists can do all of the above except for prescribing meds. So saying "this is psychiatry and that is psychology" isn't really a thing except where medication is concerned. It wouldn't even be fair, in consideration of neuropsych, to say that psychologists categorically don't treat diseases as having root biological causes.
The notion of "biological root cause" is very controversial. In fact I would say that applying the notion of root cause to a distressed individual is part of the problem with the establishment—the situation is inherently complex, involving social context and psychodynamic aspects as well as biology.
If we had a solid reductionist biological theory of mental illness, we would still sometimes discover that the cause was strictly "outside" the patient's own physiology.
Psychologists certainly go along with the fashionable talk of "chemical imbalances", but unlike psychiatrists, they don't really claim any authority when they do it.
I've heard this claimed a lot, but I'm unsure what _is_ the current status quo in psychiatry.
I say this as a layman who has undergone treatment from therapists and psychiatrists for years.
I'm not sure exactly what claim you are referring to. Maybe if you articulate it I can comment properly.
My general impression is that the only way to communicate how psychiatry is would be to write a very thick novel with characters who occupy many different positions in relation to the profession. Even then it would be hard to give an all-encompassing impression.
Pretty much any competent psych*gist knows "chemical I'm balance" is a total crock of shit. But, it is reassuring to (most) patients to have their lived experience explained in terms of an understood model. Pharmacological interventions are basically running through a list of candidates drugs and asking the patient how they feel. (Limited third party observation in inpatient settings, but really everyone is too overworked). There is a bit of a flow chart to determine what classes of drugs to prioritize in the search, but it is not nearly as deterministic as e.g. antibiotics; stuff is used off label all the time. For example, I knew a person who lived bipolar 1 with extremely pronounced psychotic features. She finally ended up stable on... Amphetamine, plus an snri specifically contraindicated in anything involving mania or suicidal ideation. That's like, absolutely inconceivable. Yet it's worked for the past ten years or so.