This article is from the Flamenco for Classical Guitarists FAQ, by Joshua Weage (email@example.com) with numerous contributions by others.
For non-flamencos, I can't say -- maybe it is having an incredible
rasqueado, or being able to play Entre Dos Aguas, or Luna del Fuego, or a
tremolo from granainas.
For flamencos, it is the ability (at whatever level of skill) to accompany a
knowledgeable singer (and knowledgeable dancer) who is performing one of the
standard forms in a more or less standard way. You don't have to be very
*good* as guitarist to qualify. Many singers in Spain, for instance, knowing
only two or three chords, and playing execrably by anyone's standards, can
crudely accompany themselves or someone else. Most wouldn't claim to be
guitarists at all. But they would claim that whatever they're doing on the
guitar is flamenco, not something else. They know the song, and they know
what the guitar needs to sound like to go with that, even if they don't know
the guitar itself well enough to pull it off very well.
So, whatever else you are able to add to that -- machine-gun rasqueado,
blinding picado, etc etc -- it starts there: you know how solea goes (as song
or dance), for instance, and what will fit it on the guitar. It doesn't mean
you have to sing or dance yourself (though that can be an eye-opener) anymore
than a sportscaster has to be able to pitch. The sportscaster *does* have to
know the game, however. (Or fans complain.)
This may sound like an eccentric definition to musicians who admire many
other things about flamenco, and may not give two hoots about cante or baile
(dance). All I can say is get yourself into a group of flamencos and check
it out. The guitar will invariably wind up, by subtle or not-so-subtle
consensus, in the hands of the guy who can accompany the singers and dancers,
not those who can't, no matter how superb the others variously are as
musicians and guitarists. It's not that superb musicians are not recognized
and valued; only that for flamenco to happen, the group needs a guitarist who
knows how to support the singers and dancers.