I find it usually means "smart and stylish". Not necessarily suit and tie, not necessarily open-collar - whatever you think is appropriately dressy and stylish without being black tie. Usually implies a jacket of some sort, unless seriously hot weather.
For afternoon events in summer, I tend to use an off-white cotton suit, with a open-necked linen shirt.
In evenings, I usually will go with suit and tie, but in fun, interesting colours and more flashy/less conservative than business wear.
Or you could do a "Clooney" - charcoal suit in a nice fabric, white open-neck shirt, neat but elegant shoes and accessories. Always looks relaxed, yet stylish.