What exactly is women's fiction? If the book is targeted to women does that make it women's fiction? Does it need to be written by a woman? Does it have to have a female protagonist? Does it have to deal with women's issues, or simply more general issues but presented from a women's perspective? Is romance a must?
My own opinion is that it can be written by either a man or a woman. It needs to have a female protagonist. A relationship has to be one of the central themes (this could be a romance, mother-daughter, friends, sisters, etc.). I personally don't group romance novels in the women's fiction group anymore; I think they are worthy of their own category considering the formulaic requirements and multiple subgenres (regency, paranormal, historical, contemporary, gothic, etc.).
Why does it matter? It's not like book readers walk into the store and say "I'm going to buy some women's fiction today." But buyers for book stores use these labels all the time, and since they are the gatekeepers it means the rest of the industry uses such terms too.