My interpretation is a child is reading once they transition from decoding individual words and begin fluently reading sentences. My definition may be skewed by my oldest child reading books (dr Seuss level) by the time he turned 3. I probably didn't fully realize how strange that was until he got a bit older and we would pull up an old video. My middle child seems even brighter, but isn't as fascinated by letters/decoding. He is 3 1/2 and I wouldn't consider him to be a reader, despite his ability to recognize many words and spell names that are important to him.
When I would judge against a milestone chart, I'd use my definition of reading. If I'm talking to another parent, I accept whatever their definition may be.
