Passive income is income that is made without you needing to be present at the time in which it is earned.
Active income, on the other hand, is income that is earned via the "earn X amount for X amount of work" model.
Neither are truly "passive". Of course you will still need to do work in order to generate income. However, by setting up a "passive income system" (such as a website where you have a product(s) for sale), you have the abilities to earn income while you are away from your computer.
After the system is correctly setup, you could completely stop doing work altogether on it, but you will still have the potential to earn income (via people visiting your site and making a purchase).
Yes, you will likely need to add fresh content to the site as well as maintain it. However, if you wish to take an extended vacation, you can do so without cutting off the income flow.
So no, "passive income" is not truly passive, but it is a different means of income generation then the more well-known and generally accepted "active income" model (ie. Working a normal job).