What are silos in SEO? Does it mean to connect your web pages through contextual links in a systematic manner?

I recently heard about this concept and what I understand is that connecting your web page contextually (anchor links) in a systematic manner ( Main page to the last page)

For e.g.

Home page linked to service 1, service 2 & Service 3 (contextually - on keywords like service 1)

Service 1 linked to service 1a, service 1b & service 1c

Service 2 linked to service 2a, service 2b & service 2c

All these pages are contextually linked

Is this called siloing? Even if it is not, is it good to follow the above strategy