A model ship is a scale (or proportionally approximate) reproduction of a ship, designed to be a faithful representation of its shape, dimensions and characteristics. This may depend on the materials or the ability of the craftsman, but what differentiates a model from a toy or a decorative object is the desire to faithfully reproduce a real ship on a smaller scale.
There are many different types of models: shipyard models (made in the workshops where real vessels are built, to serve as a decoration, a sign of prestige or a three-dimensional blueprint), votive models (made as a sign of religious devotion as a result of a dramatic event), teaching models (generally large, used in nautical schools to train future captains and navigators), scientific models (showing a project or a prototype), archaeological reproduction models (that aim to represent a ship from the past as faithfully as possible using information from historical research or an archaeological excavation), pontó models (made of ivory or bone), etc.
Therefore, models are miniature ships meant to show us, in as much detail as possible, a vessel that we cannot see otherwise either because of its dimensions or because it no longer exists.