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At its simplest, stereo would include a left and right signal that would place different parts of a musical composition at different places along a 190/degree plane to simulate what you would hear from a live group standing at different spots on the bandstand.
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Quote from Mac
What you describe above is known as a "binaural" recording. The binaural recording, once quite popular, was the attempt to recreate the actual exact sound of a performance, inclusive of the room acoustics. That kind of recording is hard to find today and has fallen by the wayside for all but the smallest group of purists in favour of the Stereo recording, which is quite a different animal entirely.
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Hi Mac
Have to disagree there, binaural recording had nothing to do with listening to the recordings over speakers, it was a recording technique to allow headphone users to hear the sound naturally rather then inside the head.
Essentially a Dummy head was made and 2 microphones were place inside the ears of it, this meant that the recordings picked up all the details as a human ear does, then when you played this back over headphones, it gave the user the full spatial experience rather then inside the head.
It was completely useless for use on speakers, as speakers are placed much further apart. (They don’t match the original microphone spacing)
Regards

Bill