The captive lady who must remain in the tower due to a curse put upon her, is not permitted to look directly at the outside world. To compensate for this she views the world through a mirror which provides images that she matches to the sounds she hears outside the walls that imprison her.
The description of Sir Lancelot has to be a vision or created by the lady's imagination because she cannot look at him directly as he passes outside her tower. She imagines what he must look like and how he behaves as she hears him singing outside her tower.
"He rode between the barley sheaves,
The sun came dazzling thro' the leaves,
And flamed upon the brazen greaves
Of bold Sir Lancelot.
A red-cross knight for ever kneel'd
To a lady in his shield,
That sparkled on the yellow field,
Beside remote Shalott." (Tennyson)
She could not possibly have seen him approaching or any of the above, because she only glimpses a shimmer of metal through her mirror.
"He flashed into the crystal mirror,
"Tirra lirra," by the river
Sang Sir Lancelot." (Tennyson)
Then she dares to look out the window, so curious to look at the singing knight and immediately feels the effects of the curse upon her.
"She left the web, she left the loom,
She made three paces through the room,
She saw the water-lily bloom,
She saw the helmet and the plume,
She look'd down to Camelot.
Out flew the web and floated wide;
The mirror crack'd from side to side;
"The curse is come upon me," cried
The Lady of Shalott." (Tennyson)
Her long description of Sir Lancelot comes mostly from her imagination so yes it is a vision, she barely gets a glimpse of his helmet and plume before the curse warns her away from the window.