You are correct. At the time, AOL had released TiK and documented the TOC protocol but TiK was a bit slow and clunky, so Mark Spencer, the original author of GAIM, implemented faster client in C using GTK for the UI. OSCAR support came later because OSCAR supported some additional presence features (I think?? It's been a while...) and because ICQ also used OSCAR.

Pidgin and libpurple also have roots in another project called Everybuddy which was one of the first multi-protocol integrated free software chat clients. As I recall, Torrey Searle started Everybuddy because he was having a hard time getting traction on adding multiple protocols to GAIM at the time for a variety of reasons my hazy memory doesn't really remember.

For a couple of years after GAIM started to get plugin and multiple protocol support, much code was shared between GAIM and Everybuddy, and then eventually effort centered around just one of the code bases which eventually became Pidgin and libpurple.

Source: I was involved in GAIM early on and Torrey is a friend from those days.

I remember when they shut down TOC. I think that was close to the time it was renamed gaim to pidgin. My whole college career surrounded aol away messages. One time I put an away message of “Dave Matthew’s coming to play at our school. Click here for tickets” and directed them to goatse. Yeah I was super cool.