I know many words, but whenever somebody asks me for the direct meaning/definition of a certain word, I can't remember it off the top of my head. I just can't. I know how to use words in context, but I just cannot seem to bring myself to know what they mean just like that...Is that bad?
It means you don't really understand the word completely yourself - you only have a passive idea of what it means. Happens to native speakers all the time. Yesterday my friend asked me what "rampage" means - now I can use it, but I can't explain it, because the truth is, I only have an idea of what it means and the images it conjures for me, but I don't actually KNOW it. There's a difference. I am of course excluding the really complex, abstract kinda words where it could mean more than one thing or where simple words cannot explain it.
MatrixGravity, I have seen your other thread in which you are asking about the benefits of reading, and maybe this could be one of them. If you read more, you'll come accross words in different contexts. It will make you think about them more and possibly understand them better. Then you'll be able to explain them right away.
It may help to actually look up the word when someone asks you about it. This question reminds me of a scene from a movie made years ago with Winona Ryder and Ethan Hawke. I cannot think of the name of the film right now, but it was a pretty well known movie. Anyway, these two actors were unemployed recent college grads. Winona was at a job interview and was asked to define the word "irony." She struggles with this, and can't come up with anything other than, "well, it's when something's ironic." Still struggling with this idea, she later brings up the subject with Ethan Hawke's character, trying to get some sympathy for the idea of 'yeah, who could define irony, even though we know it.' Hawke's character very nonchalantly and off the top of his head, says "it's when the literal meaning is the exact opposite of the intended meaning." I know this nugget is not helpful in answering your question, but it points out that your issue is not that uncommon. Idle has some good advice -- sometimes reading the word a lot in context, and then also looking up the definition to get a precise meaning, is just what you need. The combination of both really solidifies your understanding of the word.
There's a definite art to producing a good definition. Sometimes when I use a dictionary I will marvel at the succinctness and clarity of a definition. If you can use the word accurately in context I wouldn't worry too much about definitions.