This is exactly it. We don't have a short snappy term for onion where you have fried it just enough to burn off the harsh chemicals, so recipe writers went for "caramelize" instead of a clunky construction like "lightly softened, translucent".
There is a term for cooking onions like that: it is "sautee". That specifies the method cooking bbut the "lightly softened, translucent" level is what everybody assumes.
The solution to confusion might be contact everyone using "caramelize" to verify they mean that or sauteing.
