No, they mean the usual definition of the word, the biological mechanisms that regulate sleep/wake processes in the body, synchronized almost entirely by light, run by a small bit of your brain.

Regulated by just sunlight or any light? Basically is it wavelength specific etc?

Mostly blue light: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7065627/

This is why blue-light-dimming night modes are being integrated into devices.

Both, and, doing it at night, not during the day.