I can quote wiki too
"The name Wine initially was an acronym for WINdows Emulator. Its meaning later shifted to the recursive backronym, Wine Is Not an Emulator."
Its not a true emulator, but for explaining it to someone who doesn't even understand that it only runs windows, it works. The recursive acronym itself implies that the original name still has some truth to it, even if it isn't literally true.
oh wow wikipedia is really something, isn't it? do you take whatever it's written as truth? IMO wikipedia is full of flaw...
Here is something that really is important to read and to understand what wine is:
Wine is a translation layer (a program loader) capable of running Windows applications on Linux and other POSIX compatible operating systems. Windows programs running in Wine act as native programs would, running without the performance or memory usage penalties of an emulator, with a similar look and feel to other applications on your desktop.
The Wine project started in 1993 as a way to support running Windows 3.1 programs on Linux. Bob Amstadt was the original coordinator, but turned it over fairly early on to Alexandre Julliard, who has run it ever since. Over the years, ports for other Unixes have been added, along with support for Win32 as Win32 applications became popular.
Wine 1.2.1 was released recently, and our developers are currently working towards a Wine 1.4 release. There are bugs and missing features, but many people find Wine useful in running a growing number of Windows programs. Please see the Application Database for success and failure reports for hundreds of Windows programs, as well as the Bug Tracking Database for a list of known issues.
A broad spectrum of Wine developers can be reached in the Wine forums and mailing lists. Comments about the winehq.org website can be emailed to . Alexandre Julliard leads the Wine project, and may be reached by email at .
We've also assembled a short list of resources to help you understand the project:
source: http://wiki.winehq.org/AboutWine
and Here a small explanation of what WIne isn't:
# Common Myths about Wine
"Wine is slow because it is an emulator"
Wine's not that kind of emulator
When users think of emulators, they think of programs like Dosbox or zsnes. These applications run as virtual machines and are slow, having to emulate each processor instruction. Wine does not do any CPU emulation - hence the name "Wine Is Not an Emulator."
Some people argue that since Wine introduces an extra layer above the system a Windows application will run slowly. While technically true, Wine is no different from any other software library in this regard; even newer versions of Windows must load extra resources to support older applications.
Importantly, the combination of Wine and Unix can sometimes be faster than Windows itself. This is especially true when the system has good drivers and the application isn't exposing any Performance Related Bugs.
See also: BenchMarks
source: http://wiki.winehq.org/Debunking_Wine_Myths