Are you mad or frustrated, or am I misreading your post?
As for your basic question of what is gifted and who decides, just two weeks ago, I got a sheet from the school sent home in every child's folder describing the process for identifying gifted and talented students. It was very detailed and bureaucratic, doubtless to attempt to ensure fairness. Since I was surprised by the detail and thus read it closely, I'll repeat what I recall.
Nominations of potentially gifted students could be submitted by many sources (parents, teacher, staff person, community member) and given to a variety of sources (principal, gifted and talented teacher, etc). Parents and teachers were then asked to fill out a report, and I suspect results of classroom work and possibly standardized testing were submittted. Then a district gifted committee of XYZ composition met at certain designated times of the school year (3-6 times, as I recall) to consider all this information, with a requirement of deciding, communicating with parents, and providing appropriate services to the child, each step within XYZ timeframe. If an application wasn't received more than XYZ days before the committee met, the application would need to be considered at the next meeting.
Yada yadda. It was very detailed. So I think there is a whole process with multiple sources of input to decide who is gifted in our school district. I doubt it is infallible - what is? - but it did not seem arbitrary or resting on one or two people's opinions either.
Advice and commentary on living overseas
DD1 15, DD2 12, and DS 9