Good graphics are pretty much everything that just looks good. It could be an art direction, the engine, the animations or pretty much all of the above. Some games fail in this because they lean too much on the engine side, so that the engine itself can render spectacular things, but the developers ruined everything else by some small decisions (looking at you, Battlefield 3). Other games like Mass Effect fail in the animations department (especially the first one, the anims in that one were horrendous even for its time). Some others fail in the art style (you’ll probably disagree with me on this, but Halo has a pretty bland art style).
It comes down to a good mix of the three (read, Half-life 2, Team Fortress 2 without the stupidity, Bastion, Limbo, World in Conflict, even Minecraft)