Sims are a genre of games. Just like shooters, RPGs, strategies, etc.

I don't know why people say, "Flight Simulator" is not a game. The could be said about Call of Duty.... It is not a game is an soldier simulation. Uncharted is not a game it is a adventurer simulation. Mario cart is not a game it is a carting simulation.

Every game is a simulation of something. The whole idea of most games is putting a person in a "role" within the game and "simulating" that role through the game. There are exceptions, but 90% of games fit in that pattern. In Flight Simulator, your role is the pilot, and it is an open world game where you simulate flighting from place to place. Just like in Call of Duty games where you are a soldier and you simulate the military experience through each chapter.