The term "milsim" varies so much, depending on which groups you ask, that I've stopped using it for my projects.
For some it encompasses a lot of aspects of reenactment, accurate gear, etc; for others it's the scenarios/missions, having a chain of command; for others yet it's real cap loadouts and a specific mindset and operating under "realistic conditions" (there's another can of worms), etc etc etc ad nausium.
Globally, in its simplest definition, it should be about an event which reasonably resembles the conditions associated with a real military operation. And most importantly, participants should espouse a sufficient temporary suspension of disbelief to fully immerse themselves in the experience -- not least of which would be treating the risk of being shot by a plastic BB as if it were a real bullet.
But that's pretty (extraordinary) broad, which leads to the confusion/varying definitions.