It means that a player must have that chunk loaded. If you're in a chunk, a 5x5 square of chunks will load around you (you're in the center).
So if you leave the chunk, it stops growing? Does this mean that an afk rail is obsolete or practical?
So long as the chunk, or chunks, are active, crops will grow. For a small farm this could simply mean standing still in the middle. For larger farms, an afk rail is practical.