Yes. it means you have 2 physical processor cores on one chip.
Each of those cores is "multithreading" capable. In consumer level Intel processors the number of multithreads is 2.
So you have 2 cores x 2 threads per core = 4 threads.
A "thread" is, simply put, an instruction. In a simple design there is just one instruction allowed per pipeline. A multi-thread design allows for "parallelism" in which one instruction can go out at the same time another can come back, so it can do two things at one time.
This is, of course, a gross simplification. But should give you an idea of how your processor is designed.
Hardware monitoring programs will often show a 2-core multithreading processor as 4 CPU's, because that is how they behave.
