What criteria are used in determining a literacy rate?

For example, when we say “Ancient Rome had a 50% literacy rate”, what exactly does that mean? 50% of citizens? 50% of all those considered to be adults, regardless of gender, land-owning, freedom, class, etc? 50% of all people, including infants? Exactly how literate does one have to be in order to be considered “literate”? Can write their own name? Can read a children’s book? Can text, but novels and textbooks are out? Anything above, say, an 8th grade reading level?