"Dungeon" is a term in game design to refer to a self contained challenge space, which can be realized in many different ways. It does not necessarily mean "dungeon" as in a real life dungeon or catacomb. It can be an actual human built space, in which case you are right, or it can be a Zelda dungeon, in which there is an overarching theme but not necessarily a sense of verisimilitude, or it can be such a simple and abstracted dungeon such as in Nethack or whatever, in which case those concerns are meaningless.