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Special effects are those visuals which cannot be achieved exclusively by practical means during principal photography. They can be accomplished with the varying techniques of CGI, model work and a variety of other techniques. Even practical effects can be used as an element in a "special effects shot".
For the most part the starting, "canvass" for special effects is a blue or green screen placed behind actors during principal photography. This solid patch of color an then be removed and replaced with another image. During much of the original series, this was achieved through a process known as Color Separation Overlay, whereby a blue screen would be fed images during the live recording of the shot. Since the TV movie, most of the special effects seen on Doctor Who have been achieved through the use of CGI, a more nuanced approach to special effects which allow elements rendered on a computer to be composited into a shot captured during principal photography. As contrasted with CSO work, CGI work is completed exclusively post-production. For this reason, many no longer consider CSO to be a true special effect.
The term describes both the person completing the work and the work itself. Thus The Mill provide special effects and are given the title of "Special Effects" in the credits of the 2005 series of Doctor Who.