What is the difference between contig- and read-based sequence alignment?
I have never heard the term “contig based alignment”, and your question is the only Google hit of this exact query (apart from a 2012 patent application).

That said, and without knowing the exact context, I am assuming that you are essentially right: contig-based alignment probably refers to the de novo assembly of reads into contigs, which are then aligned into a scaffold by use of a reference.