No dude, you've got it all twisted. To see an engine's power, the BEST way is on an engine dyno. The real 1:1 testing you are referring to is using a chassis dyno. While you can make accurate estimates of an engines power output based on chassis dyno results by taking the drivetrain losses into account, a chassis dyno is more for seeing what the whole vehicle combo is putting to the drive wheels. You would want to put the engine on a engine dyno if you were trying to pinpoint it's output.

[link=http://en.wikipedia.org/wiki/Torque]HERE[/link] is an explanation/definition of torque, if interested...