Determining viewing magnitude limits

I'm really not certain what it means when folks say viewing conditions were
"magnitude 6.0 sky" or words to that effect but I guess it has something to
do with the dimmest objects that can be detected with the naked eye (?) at a
given time -- e.g., if last night was mag 6.0 skies, I could see mag 6
objects with the naked eye but nothing dimmer. Right?

And -- I read somewhere that a rule of thumb is to count the number of naked
eye stars visible inside the Great Square of Pegasus -- if two are visible,
that's mag XX; if (n stars) are visible, that's mag (whatever). Did I
understand and, if so, what's the rule of thumb for using the Great Square?

Thanks.

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Joe S.