It does indeed mean "I'm really hungry" but for a lot of people it means they are very hungry because they have smoked marijuana. It's like a sudden, almost uncontrollable desire to eat. Usually people eat junk food to satisfy the munchies, and a lot of it. A whole bag of chips, a package of donuts, and nacho chips with cheese. Maybe a few hot dogs just for good measure. : )
For those who haven't smoked marijuana, it just means a strong hunger that requires some junk food to satisfy. You wouldn't go to your friend's house for dinner and say, "Mmmmm. I've got the munchies and that chicken dinner looks great."
Well, some of you would, but that's another story. ; )