  We analyze the physical conditions, chemical composition and other properties
of the photoionized Herbig-Haro object HH~204 through Very Large Telescope
(VLT) echelle spectroscopy and Hubble Space Telescope (\textit{HST}) imaging.
We kinematically isolate the high-velocity emission of HH~204 from the emission
of the background nebula and study the sub-arcsecond distribution of physical
conditions and ionic abundances across the HH object. We find that low and
intermediate-ionization emission arises exclusively from gas at photoionization
equilibrium temperatures, whereas the weak high-ionization emission from HH~204
shows a significant contribution from higher temperature shock-excited gas. We
derive separately the ionic abundances of HH~204, the emission of the Orion
Nebula and the fainter Diffuse Blue Layer.In HH~204, the O$^{+}$ abundance
determined from Collisional Excited Lines (CELs) matches the one based on
Recombination Lines (RLs), while the O$^{2+}$ abundance is very low, so that
the oxygen abundance discrepancy is zero. The ionic abundances of Ni and Fe in
HH~204 have similar ionization and depletion patterns, with total abundances
that are a factor of 3.5 higher than in the rest of the Orion Nebula due to
dust destruction in the bowshock. We show that a failure to resolve the
kinematic components in our spectra would lead to significant error in the
determination of chemical abundances (for instance, 40\% underestimate of O),
mainly due to incorrect estimation of the electron density.
