This achievement means wiping out that player.  A player is wiped out completely when they have no towns and their Sov has been defeated with no town to retreat to.  If the Sov is in the last town, it can happen at the same time.  But Defeating Sov in Battle achievement is for when you wipe out the Sov and they have no towns left.  Although some people have said they have done this without receiving the achievement, you only can get the achievement by wiping out a player completely (you don't get it if you make them surrender).