Either the file size or display size of an image. File size is referred to in kilobytes (i.e. 20k), and display size is referred to in pixels as width x height (i.e. 468x60)
This is the size of the actual image, not the surrounding border. Unless part of the border is to be shown, the window of the mat should be smaller than the image size in order for it to be attached to the back of the mat.
What's going to be showing on the poster or where the matting stops and the artwork begins. Typically the image size will be 6" smaller in both dimensions than the final size, when you put 3" matting all around.