Yes, most likely it's looking up the Gracenote CD database, which compares the table of contents (TOC) contaning the track times to its database. This is usually enough to identify any album, though less reliable when it comes to singles or EPs

Most commercial releases have an ISRC number which identifies each track positively (don't know how that works with albums), which is handy for radio stations as they can log airplay automatically. But Gracenote doesn't use that as yet.

Using the TOC means pretty much anything can be added to the database, some media players (iTunes for one) allow you to submit this information yourself.