That's right. In short it's something like this: stocks trade on their primary exchanges during specific hours. For example 9:30 to 4 in the US.

Part of it is legacy from when trading was done by actual humans being at the exchange physically to trade during those times and part of it (I would guess is still the case) is to allow plenty of non-trading hours for back-office jobs and settlement.

So yes there's a special start of day process that runs at 9:30 that runs through all the orders on the books at that time and determines a price at which some optimal set of those orders can trade, trades them at that price, and also posts that price as the Open price for the day.

The process is different during continuous trading since orders are one by one matched against the order book.

Source: ran one of the world's largest equity platforms for 5 years.