With all due respect, calling adding multiplayer a big piece of DLC means you have no idea whatsoever of the work involved on the technical side and maybe should avoid talking about things you don't know well.
Is expansion the right word? And wasn't there much more that was added with Warband than just the expansion. Haven't played Vanilla M&B in ages so I can't remember the details :/
For me it's pretty much this:
DLC is small additions like extra quests, items story etc.
Expansion: is a LOT of extra content but still using the same engine or a small rework of it. (I know "small" is relative)
Sequel (prequels too, I guess): Same series, but it's a new engine.
Warband is then an expansion I guess. I don't really know the details about the engine.
No matter what. I really like that they done this and am definitely going to buy it. Good to see modders being acknowledged and getting recognition and more from the developers.