so I wonder if "was bedeutet [Wort]?" is a correct way to ask what a word means in German.
Yes, that would be a perfectly valid question for the meaning of [Wort].
If that would be your complete sentence, though, it could possibly be taken as a little rude or you could be taken as non-serious, as it is lacking any politeness
(It depends, obviously. Most folk's won't take it bad, but if you are about to take an interview, this would not be best practice)
Personally, I think that German is a very verbose language. As you can see in Toscho's answer, the native speakers often like to attach informations to the original idea of the sentence.
Instead of merely asking
Could you explain the meaning of the term [term] to me?, an additional
I don't understand is added as a second sentence.
So, contrary to asking
Was bedeutet [Wort]? you could say something like
Entschuldigen Sie, könnten Sie mir die Bedeutung des Begriffes [Wort] erläutern? Er ist mir nicht geläufig.
Obviously, that is not something an amateur speaker would actually say. Don't overdo it, just try to be a little polite and explain what you want as clearly as possible.