From a purely technical standpoint, the term emulation means that, you're trying to emulate something either via software and/or hardware. So having a real Amiga as a choice is not really correct, just my opinion of course
As for bus arbitration, I believe it has to do with the expansion bus, for instance the Zorro bus and any cards connected to them, where it's decided which card has the highest priority and thus gets to hold and use the data bus for it's job until finished. Then the next card with next highest priority gets a chance at the data bus. I think this also holds true for the custom chipset, the OCS/ECS/AGA graphics, the sound, the I/O etc. They also have a say in this and what device gets to talk to what and when.
Faith, correct any inaccuracies please