Yes, it is metaphorical. Google is not exactly creating a new kind of material for android devices. However, that's not the point. Therein, I'm going to try to explain material design.
Material design at heart is an evolution of paper. It is a piece of smart paper that can to stretch to any screen size, change color, animate, move around, and produce tactile feel on human interaction. By layering a few of these papers front and backward, we get a user interface for a screen.
Rather than just a new visual style, the material design concept is a solution to many problems. (design is in itself is about creating solutions)
Firstly, material design is a visual solution that enables google to apply the same design style across many many different screen sizes. Instead of limiting the design to the confines of any screen (which comes in many sizes); what happens is the paper intelligently stretches to fill the screen space. Thus it will work on mobile or desktop or any screen necessary.
Secondly, material design thinking applies the physical rules of paper to user interface design. This introduces a way to achieve animation on Android without allowing designers to go overboard with animation design. The animation must still feel natural (like paper, which is why paper is such a good concept to bring to the screen) and not escape the physical limitations of paper. This achieves consistent design animations and design stylisation across apps. Consistency is beautiful design.
Thirdly, material design is a coding solution. Layering is a concept familiar to artists and graphic designers in software like Adobe Photoshop etc. What material design does is apply this to the coding for material design apps. This proves useful for coders who are not proficient in design to be able to easily follow google's material design to create beautiful apps, and as well designers that are new to app coding will find it more familiar to relate to.
As such, this is why many relate to paper when talking about material design. Watch [watch?v=Q8TXgCzxEnw] this video again with these thoughts in mind and you'll better understand it. If you'd like to study more on material design, absolutely read [google(dot)com(slash)design]
and the pdf inside of that link. The most important explanation about why material design was created is on the last page
Material design is a really deep and wonderful concept and as a designer I feel it truly stems from the basic core of design itself. Understand material design philosophies would mean you will understand what design is all about.
I hope this enlightened