Without finding a better definition, wikipedia offers this:
a.. 'Physical delivery' - the amount specified of the underlying asset of
the contract is delivered by the seller of the contract to the exchange, and
by the exchange to the buyers of the contract. Physical delivery is common
with commodities and bonds. In practice, it occurs only on a minority of
contracts. Most are cancelled out by purchasing a covering position - that
is, buying a contract to cancel out an earlier sale (covering a short), or
selling a contract to liquidate an earlier purchase (covering a long).

Here's the nymex light sweet crude details, including the delivery point
(Cushing, OK) quantity (1,000 barrels) and delivery methods. It is a
physical delivery contract.

It's interesting that if a delivery purchase contract can not be matched
with a delivery sale contract, that the exchange randomly picks, ususally
from the largest long position holder, a contract to force delivery to the
buyer.

Jim