What exactly is an "otaku" when japanese say it? I'm learning japanese for many reasons, but paramount among them is to play and read about video games that weren't released elsewhere, so I would figure that makes me an "otaku" if we're talking about being a serious games enthusiast, but I am confused by

1) the basis for how someone is an otaku
2) what an "otaku" means, like what judgments or stereotypes are associated
3) what people are insinuating based on asking if you are an otaku

The last one sticks out, because often when I meet japanese people, they will at some point ask if I am an otaku. Sometimes they ask probably because many foreigners learn to watch anime and shit, and so they assume that's my reasoning too. Other times, I'm confused, cuz it'll be like someone tells me they loved playing taiko drum master in the arcades as a kid, and I'll talk about how I enjoyed playing pop'n music when I was younger, and they'll ask me if I'm an otaku. Like, is pop'n an otaku game? I dunno.

Furthermore, I wonder about what people think when they see someone as being an otaku. I tend to see myself as being very different from the teenage shounen watchers wearing Naruto headbands and practicing the haruhi suzumiya dance (dating myself there I guess), but perhaps there isn't much distinction in japanese eyes. I mean, does having a wife and a job make me not a real otaku? I dunno. Maybe it's just "you're a weirdo" as long as you have a non-standard hobby. I have heard japanese are really judgmental of abnormal people, so maybe that's just this coming out. But then, a friend once told me that she received pics from a Japanese friend of hers subtitled "look at these otaku on the train!" And the defining trait was that they were wearing backpacks. I just don't get it.

Hopefully my questions make sense despite being very sleep-deprived from working all night. Requesting info on what/how japanese people evaluate "otaku" as a concept.