Exactly what it means. Maybe I should explain further. When we say dao in fantasy, we are simply refering to the way/path of fantasy genre writing. That's why we have daoists in every possible genre.
If you say it's the same with webnovel, well...
What a pity that xianxia/wuxia/xuanhuan have been reduced to ridicule. Ah! My humble daoist heart bleeds.
Xianxia! The eternal glory. Wuxia! The infinite pride. Xuanhuan! The undying fate.
My heart bleeds.