What a Target Market / Target Audience is?
A target audience is the demographic of people that are most likely to be interested in buying your product.
A target market is the market/demographic you are marketing the game for.
How would you define a Target Audience?
A target audience is the audience that actually end up consuming the product. These are the people that will give you feedback on your product and will possibly be who affect the development of your next product when you try to develop it.
What PEGI/ESRB are?
The ESRB and PEGI are both age rating board for the games industry. They will place an age rating and content descriptors, ESRB also have interactive element labels, on every game before they can be released into the market. These age ratings provide a guidance to consumers, parents in particular, to help them decide whether or not to buy a particular product for a child or relative.
Unfortunately, the ratings boards are owned, and run, by heads within the game industry, like the CEO of EA, and could possibly be controlling stuff to suit them. For example, the in-game purchases label was only recently implemented for games with lootbox features, which are just glorified gambling being sold within kids games.