To me, simulation is when a ruleset attempts to emulate the "physics" of the genre, and lets emergent behavior shape play.
Let me unpack what I mean by "physics", and I'm going to go to the venerable Champions (now Hero System) RPG that I played decades of. In that system, there is an underlying mathematics about all superpowers, tech, magic, etc., in order to keep it all working with the same set of rules. There's also a power cap -- think bounded accuracy but for the magnitude of powers. Once you have that, everything you do mechanically just devolves to the same set of rules -- 3d6 roll low to succeed on checks including attacks, and powers that share basic rules about Endurance costs, tallying effect, etc. If I punch someone or shoot them with a blast of energy, it will likely do (power cap/5) d6 of damage, which we roll and work out Body and Stun damage done, both of which defenses can reduce. How far you are knocked back (this did start as a superhero genre simulator) is Body less a few d6.
Gameplay is emergent from this. It aims to make the world feel like the genre (not necessarily real life). I mentioned Knockback in the example above, that's something common in various superhero genres, so the rules are sure to emulate it.
This doesn't mean there can't be rules that support non-simulationist rules, such as Inspiration in 2014 D&D 5e, just that it's not the primary.
A successful simulation ruleset often needs to be aware of the game properties of the system, as a simulation could easily make certain aspects emerge as much more powerful to the detriment of archetypes and tropes in the genre. For example it's easy to believe that a strong hero's punches are equal to another's flame blasts, but in a SF or cyberpunk genre if non-powered-weapon melee combat is part of the genre, the simulation needs to work out how that coexists in the world of firearms to make sure that it doesn't cut off the options that it wants to present.