It doesn't mean everything is a convenient walking distance away, just the most important things that you do daily or weekly: groceries, pharmacy, library, schools, etc. For some things that aren't needed as often, you might need to take a bigger trip. Say to go furniture shopping, go see a lawyer, go watch live sports, etc.

I'd say I live in a walkable city -- or at least in the walkable part of a city. Everything I need regularly is a short walk away. I don't have a car, and don't feel like I need one. I can walk to get groceries (in fact, there are 2 different major grocery stores within a 15 minute walk). But, if I want to buy specialty groceries, like specialty Asian or Mexican foods, it's a bit too long for a comfortable walk, so I prefer to bike.

Having said that, even though it is a very walkable part of the city, it is still dominated by cars. A lot of people don't take advantage of the fact that it's walkable and they drive, even just to get groceries nearby. Because of all the driving, the walking isn't nearly as pleasant as it could be. The area has a fair number of things that make driving inconvenient, including cul-de-sacs, speed bumps, one-way roads, etc. There are enough things designed to reduce vehicle through-traffic that I can get almost anywhere nearby faster on a bike than someone can do in a car. There are cul-de-sac that have bollards allowing bikes to go through. There are little pathways between roads that are open to pedestrians and bikes, but not to cars. And, to be fair, it's rare that cars are driving dangerously fast in the area. But, they still own the road. And, because they're so incredibly convenient, most people around here still mostly do their errands in a car because... why not?