Imagine you have a database table that stores a list of people. You want to establish a relationship between peoples, i.e., person I is friend with person J.
Yes, this is right if you want to model a many-to-many relation. That is all persons can have many friends.
If you have a one-to-many relation, like all persons has one boss (or no boss) you don't need the extra table, then you only need a BossId column in the person table.