Resume Question: Listing your job title

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My current title as an intern is pretty boring: "Engineering Intern"... do I have to list that official title on my resume, or can I specify a little more like "Hardware Engineering Intern," "Software Engineering Intern," etc?

Also, what should I put assuming I've worked for Company X, in their Y division, and more specifically with the Z engineering team/group.

Should I put X and Y, or X and Z for my experience?
 
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Resumes should be written for the company you're pursuing. To answer your second question first, I'd say the amount of detail you provide is determined by how close the job you're applying for is to what you did as an intern. If it's very close, then I would include X, Y, and Z. If it's not very close, I'd leave out Z because the prospective employer probably won't care. I think you should include Y.

As for titles, some companies are strict about them and others aren't. If your company is strict, you've got to use what they gave you. I certainly don't see any harm in being a little more specific in your title as per your example if it clarifies you job to the employer and doesn't mislead.

My standard for truthfulness on a resume is that if my prospective employer were to call up my former supervisor and read him what my resume said and ask "Is it truthful?", my supervisor would answer yes. That still leaves some wiggle room.