What do patients think of the term 'arthritis'?

Patients expect pain, disability and significant loss of function.
Patients can desperately pursue unscientific therapies when they receive this diagnosis - and should be careful with how they spend their money - arthritis is not reversible, but you may have highly fluctuating symptoms.

What do doctors mean by arthritis?

Any cartilage damage on any part of your joint visible to the naked eye is considered arthritis by your surgeon.
This may or may not be felt by yourself, it depends on your activity levels, body weight and the actual degree of damage.
You don't need to stop being active just because you have arthritis, but you need to learn to listen to your joint and move it within your limits of pain.