Undermatched is the term for students who go to a college that is less selective and elite than what they could get accepted to. If you could get into one of the 20 most selective colleges but don't apply to any of them, then you are undermatched. If you probably would not get accepted to any of those (and most of us can't), but could still be accepted to one of the 200 most selective colleges but don't apply, then you're still undermatched. It has to do with the difference between where you could be accepted to versus where you actually apply.
Let's be clear here: the point isn't to write a "sob story" that makes people feel sorry for you and want to give you special treatment for your special circumstances. This isn't about victimhood, quite the opposite. The point is to acknowledge to yourself and be able to explain to others the challenges and frictions that make you who you are. It's about celebrating how far you've come and the skills you've acquired. When colleges ask about your special circumstances, and not all of them ask, it's not about feeling sorry. It's about understanding what kind of resilience you have and how you got it. Nobody makes it out of high school and into college without friction and resilience, so it's okay to think about your own. There are plenty of ways to think about your special challenges.