Now I accept that the term means simply 'independent music' - "used to describe independence from major commercial record labels and an autonomous, do-it-yourself approach to recording and publishing. Independent Labels have been known to strive for minimal influence on the artist they represent, avoiding the artist-cultivating behavior of many major labels. Artists represented by Indie labels have been known to be focused more on producing music than becoming wealthy and/or well known..." (courtesy of the oracle that is Wikipedia).
But that definition includes a lot of music I've never heard anyone describe as 'indie', including a lot of urban music which is not spoken of as 'indie' (perhaps for prejudicial reasons? *shrug*). Moreover, 'indie' is tagged onto bands which have had an awful lot of commercial success and are certainly not as fresh or distinct (White Lies will be described as indie, and so will Razorlight, whether you like that or not). Indeed I once considered indie to refer to unconventional, modern rock when I was a lot younger in the Brit-pop days, as opposed to more traditional rock groups. I was wrong, but there's something about that opinion that has lingered with me to a certain extent. There is obviously a difference between 'indie music' and 'indie rock' but that's not a commonly accepted distinction, I'm sure. If you mention the word 'indie' to most people they'll think of bands with guitars and drums (and maybe a bit of electronics thrown in, these days). Or if you're one of my pupils, you'll make some dumb ass statement like, "Indian music? Why are you listening to that sir?" Sheesh, anyway...
Of course, as with all labels, there's no easy way to pin it down but this as good a source for debate as anything else.