From [documentation][1]documentation
class type(name, bases, dict)
With three arguments, return a new type object. This is essentially a dynamic form of the class statement. The name string is the class name and becomes the name attribute; the bases tuple itemizes the base classes and becomes the bases attribute; and the dict dictionary is the namespace containing definitions for class body and becomes the dict attribute. For example, the following two statements create identical type objects:
class X(object):
a = 1
X = type('X', (object,), dict(a=1))
So yes, I think you have the right idea. type() does create a class but a dynamic form.
[1]: https://docs.python.org/2/library/functions.html#type