my understanding is it usually means a small office where the owner can be directly involved in each project, and the firm targets specific high-quality design opportunities.

A firm that can get away with overcharging its clients and underpaying its employees, all the while maintaining an air of smug self-righteousness?

it's where you can get a latte and have your nails done while you wait for your design

It's just a fancy name for a small or single proprietor office.  

It's supposed to convey that it's small-ish, specialized, and staffed in such a way that it can devote extraordinary attention to the projects of a targeted, small, and elite clientele (or at least a small clientele who would like to think of themselves that way).  How much that matches its functioning reality varies from one "boutique" to the next.

Small firm where you get to pick your clients, staff pick their hours, in house expresso machine.... and everyone gets paid fairly because they work hard and deliver good work.