Erase verses Remove Devise within Find my iphone

You do both. Erase and then remove.

See >>> https://support.apple.com/en-ca/HT201351

Read below:

1. Erase your device. To prevent anyone else from accessing the data on your missing device, you can erase it remotely. When you erase your device, all of your information (including credit, debit, or prepaid cards for Apple Pay) is deleted from the device, and you won't be able to find it using the Find My app or Find iPhone on iCloud.com. After you erase a device, you can't track it. If you remove the device from your account after you erase it, Activation Lock will be turned off. This allows another person to turn on and use your device.
2. Report your lost or stolen device to your wireless carrier, so they can disable your account to prevent calls, texts, and data use. Your device might be covered under your wireless carrier plan.
3. Remove your lost or stolen device from your list of trusted devices.

Erase would just erase the device so that no information will be on it, but no one can use it. If you remove it from your devices list, anyone would be able to pickup the device and use it, although any trace that you ever used it will be gone.