It technically means both now, I guess.
Indie has formed it's way into a genre (independent from 'normal' genres, I suppose)
but to me, it makes more sense to look at is as the way it's distributed. (Indie label - not a major label, or Indie - produced, funded, etc, by yourself).
Knowing this is AP, someone is going to shit all over what I've had to say, so I can't WAIT!
So indie is another way to say "alternative?"
Alternative was already such an all encompassing term for those miscellaneous bands, why do we need another one, ha.