That's correct, it was the iMac that introduced the "i" to the market and it stood for Internet since Apple was trying to make the point that the iMac was the simplest way to get connected to the Internet. You have to remember where the world was in 1998, with the Net just exploding in popularity and all the moms and dads and grandmas thinking they needed to get themselves an AOL account and get online. Apple had commercials that showed the manuals that came with a PC (big thud as they all landed on the desk), compared with the thin booklet that came with the iMac. They made a point of saying you just had to plug in a couple of cables and turn it on.
Now, of course, Net access is assumed. The "i" now stands for a brand associated with Apple. It has no meaning now, any more than WiFi has a meaning other than as a combo of letters that carry meaning by itself.