That's a poor definition which you won't find repeated in any other reference (really, take a look). The entirety of the meaning of the idiom concerns the misperception of ones opponents.
http://www.word-detective.com/2009/03/10/tilting-at-windmill...
A quick peek at Google News also shows plenty of people using it that way:
E.g.:
http://articles.mcall.com/2012-03-08/news/mc-pat-toomey-jobs... http://jurist.org/forum/2012/02/brian-landsberg-affirmative-... http://www.idahoreporter.com/2012/barbieri-wont-run-anti-tsa...