What is the graphic TSP?
Your understanding is correct.

The key point about TSP is that we are given a distance between every pair of cities. In other words, formally speaking, TSP is the problem of finding a minimum-weight Hamiltonian path/cycle on a weighted complete graph, given the weight function.  This doesn't quite correspond to the standard intuition where a salesman is travelling around an actual road network and is forbidden from visiting the same city twice, for reasons nobody can really explain.

In graphic TSP, the distance function is defined in terms of some (possibly weighted, possibly directed) graph on the given vertices.  This is much closer to the usual intuition about what TSP is: driving from, say, Baltimore to New York by the fastest route might involve passing through Philadelphia but, even if we've already visited Philadelphia, we're allowed to pass through again without stopping.