Yeah MD in UK is short for the latin equivalent of "doctor of medicine" - medicinae doctor or something similar.
It's a mini PhD in that it normally takes 2 years to complete, where as a PhD takes three years. Also, I don't think the research has to be totally original as it does with a PhD.
You can also do master's in medically related subjects, e.g. MSc which only take one year normally.
If you try to do a PhD and the university decide when you present your thesis that it isn't good enough, they often award an MPhil as a sort of consolation prize
EDIT - you go on to get an MD by enrolling at a university to do it once you've graduated from medicine