There's not really any way to interpret it differently, the Fayth says exactly that, that
Spoiler:😛
Tidus and all the other people of Zanarkand and the city of Zanarkand itself (that Tidus lived in) was just the Fayth dreaming, keeping their home alive. The Fayth are all the summoners who lived in Zanarkand and died in the war against Bevelle and the first incarnation of Sin.
I've gone the whole way through the game three times.
...you're already at Gagazet and Lulu doesn't know the third level spells? 😑 I was almost to her knowing Ultima by that battle! Oh, and once you get Yuna's Celestial Weapon, Nirvana, she will BY FAR become your strongest character ✅ my strongest characters are always Lulu, Yuna, Auron, and Wakka.