Loads of stuff (and nonsense) gets said in various places about whether it’s a ‘train set’ or whether it’s a ‘layout’… Me, I don’t care what you call it - I just like playing with my trains. So, if either version of the name offends then you may want to go somewhere else. I think of it as ‘my train set’ but I also refer to it, at times, as ‘my layout’ in a completely interchangeable fashion as the mood takes me.
Does it reflect realism? Only in the way a hall of mirrors reflects your body. You look into one of the distorting mirrors and you know you don’t really look like that, but you still know it’s you. So, my trains don’t really look like the real thing with multiple stations set miles apart, not even scale miles, but it’s easy to see that it is based on what’s actually there on the ground.