"Simulation" was first widely used in the threefold model (GDS). While it has various definitions, I'll just crib the one from wikipedia which is close enough for our purposes-
Simulation is concerned with the internal consistency of events that unfold in the game world, and ensuring that they are only caused by in-game factors - that is, eliminating metagame concerns (such as drama and game). Simulation is not necessarily concerned with simulating reality; it could be a simulation of any fictional world, cosmology or scenario, according to its own rules.
Notice that this is jargon. It has a specified technical meaning that arose in the context of RPGs, and it was about goals. It was trying to set it off against the "G" and "D" components.
The trouble is that while this is jargon, it also has specific connotations that people are familiar with in the real world. For example, when someone says that a pilot has 1,000 hours in a Boeing 737 simulator, a person who hears that assumes that the machine is designed to simulate the reality of flying a Boeing 737- not just some fictional world or fictional genre. In common parlance, simulations usually reflect our reality, and the closer that they completely reflect reality, they more accurate they are as a simulation. So this is where the Texas Two Step comes in, over and over and over again.
Zeno: I like playing that RPG because I like Lord of the Rings.
Achilles: Well, we all know that is a simulationist RPG. You like simulations! (Using the JARGON that someone is playing the game as a simulation of the LoTR genre).
Zeno: Um, sure. I like the way the game immerses me in the feeling of Middle Earth, and the fiction of Tolkien.
Achilles: HA! How dare you say that? Don't you know that game doesn't accurately simulate the economics of Middle Earth? For that matter, how can a world exist on the same technology for thousands of years? Heck, I don't even think that Tolkien understood plate tectonics and didn't accurately model how the mountains in his world formed!!!! It's not a simulation! (Using the COMMON VERNACULAR of simulation).
Unfortunately, this happens repeatedly- people that deliberately conflate jargon with the more widely-understood meaning in order to berate people for differing preferences. It's the Texas Two Step- first, get people to use jargon, then use the non-jargon meaning to criticize them, and then go back to defending the jargon. Rinse, repeat. Once you see this pattern happen, you will see it happen over and over and over again, with all sorts of terms.