Perhaps I can't exactly tell you what it is, but I can damn sure tell you what it isn't.
Indie, these days when you say that name in relation to gaming you think of small studios producing small but sometimes high quality titles. But when I say indie, do you think of EA? No, of course you don't. EA has to be one of the biggest developers out there and love them or loathe them I don't think anyone could possibly cite them as an indie developer. Unless of course the people doing the citing are EA themselves.
EA recently dropped its own indie bundle (strangely enough on Steam rather then Origin), which in turn prompted Markus "Notch" Persson of Minecraft fame to chime in some choice comments, including these ones:
"EA releases an 'indie bundle'? That's not how that works, EA,"
"Stop attempting to ruin everything, you bunch of cynical bastards. Indies are saving gaming. EA is methodically destroying it."
Notch was also quick to point out that, "FYI, I don't even call Mojang indie any more,” in a further tweet on the subject. Now, a comment in the article I linked also got my attention. IanC stated about the bundle that, "Those 6 games [which compose the bundle] were published by EA Partners. They were developed by smaller developers. EA picked them up to publish. Still sounds Indie to me." Now, I'm not entirely sure I agree with his stance, and I can certainly say that I don't agree with EA getting anywhere near the word indie as being something correct. The point this raises though is what exactly indie actually means these days.
That's a question that's a hell of a lot more difficult to answer.
Of course one could simply go with the obvious and call any independent developer an indie dev -- it is what indie is short for after all -- but I believe that sticking to the letter in this case betrays the spirit. For example I'm not sure I'd consider Team Meat indie anymore. Certainly they're not going to be the studio that you'd expect the new Call of Duty or God of War out of on most days, but their games have proven quite popular and gotten them a lot of recognition. Likewise Notch said himself that he no longer considers Mojang indie, and given how much money Minecraft has given him and some of the other projects Mojang is working on I'd tend to agree.
There's definitely a tipping point between when a studio is indie and when it's not. If I had to name one and only one thing I think that inherent risk might be what I'd name, because indie studios don't automatically put out great games, nor do games from them have to necessarily be innovative or clever. What does separate them though is that if an indie studio rolls the dice and loses, odds are they won't be around to roll them again. Getting recognition and accolades is possible as an indie studio, certainly, but the more attention and popularity they get the more the risk is diminished.
There are other factors as well, but I think risk is one of the big ones. That's why EA calling anything it puts out an indie bundle just reeks of trying to cash in, regardless of the actual size of the teams that made the games. Indie isn't just a buzzword to be bandied around when you want to make some money or imply that a certain kind of game is being made, it's an actual type of developer that might be doing any sort of project from an adventure game to a platformer to a puzzler. Think of them what you will, but trying to lump them into a fad just diminishes the indie devs that actually deserve recognition, and that's something that I believe we'd be all worse off for.