Essentially. It's kind of a fuzzy definition, but it refers to characters who, even if they aren't explicitly stated to be children within the canon of their story, are obviously meant to look/act like children. It's a controversial subject, in part because it's somewhat subjective, and in part because pedophiles don't like being called out

The most controversial example I can think of is this character from Miss Kobayashi's Dragon Maid. She has just enormous breasts. Like, half of her body weight is in her chest. Real weird fetish shit. But also, if you take away the frankly disgusting tits, it's literally just a kid

Dudes who like jerking off to her really don't like when you point that out