It all depends on who you ask. It’s a term that is bandied about these days, but like the old saying goes, ‘Beauty is in the eye of the beholder’. It's a very subjective term.

First, the general classifications:

Ship Model Classifications

Class A
Scratch-Built Model: Model built entirely from scratch materials by the builder with no commercially fabricated parts except cordage, chain and belaying pins.

Class B
Modified Scratch-Built Model: Model built from scratch, but supplemented by the use of some commercially fabricated accessories.

Class C
Modified Kit Model: Model built from materials provided in commercial kit, supplemented by other commercially fabricated parts or by scratch-built parts.

Class D
Kit Model: Model built entirely from materials provided in commercial kits.

Special
Sub Categories: Model built and/or displayed in any of the following methods:
• Antique • Waterline • Cross Section • Cut-Away • Exposed Interior • Sailing • Half Hull • Rare Materials • Diorama • Power • Mechanized • Builders' Model • Extreme Miniature • Ship-in- a- Bottle • Shadowbox • Americana • Folk Art. Decorative • Pond Model • Production • Other

(Categories provided by The Mariners' Museum Model Ship Craftsmen Competition, and by Mystic Seaport Museum; as prepared by R. Michael Wall, 1980)

Classes of Models:

The level of detail and craftsmanship of model ships can range from crude "primitives" to more detailed models that achieve true museum quality. Most of the people that see a model really don't see the minor errors.

Ship models are proliferating on the Internet in ever growing numbers, and all claim to be of the highest "museum quality". The old saying "you get what you pay for" holds true in most instances. The price of a model does generally reflect the quality of the workmanship and level of fidelity. But it takes some practice to judge which models are worth their price. This is difficult with only photographs to go by, but a trained eye can tell spot critical differences. Look at photographs carefully. Quality models show faithfulness to the original builder's plans.

Some experienced model-makers build their models from kits (bashed to the point that they are nearly scratch built). Novice model-makers discover the world of model making through kits. These construction kits contain everything necessary for building the model. All components, whether wood, brass or other materials should be designed and manufactured using sophisticated technology. But some kits are lacking in detail, and some manufacturers provide kits of factious ghost ships.

Kits generally divided between Beginner, Intermediate, or Advanced kits. Another standard division is between up to six skill levels.

Skill Level 1 kits can be built without prior building experience, using simple hand tools. Some parts in Skill Level 1 kits require cutting and fitting.
Skill Level 2 kits require slightly more skill and some prior experience using hand tools. Some parts in Skill Level 2 require cutting, fitting and shaping.
Skill Level 3 kits are intended for the person having some prior building experience building wooden boats. Skill Level 3 kits contain parts that require cutting, fitting, shaping and fabricating.
Skill Level 4 kits are intended for experienced modelers. Kits in this series feature plank-on-frame construction. Before building a Skill Level 4 kit, modelers generally construct a Skill Level 3 Apprentice kit.
Skill Level 5 - Experienced period ship builder.
Skill Level 6 - Expert period ship builder

Another opinion:

'Museum Quality'

The term "museum quality" is sometimes used to describe a model which, in the speaker's opinion, is an example of superior work. "Museum quality" is a subjective appraisal with no official definition within the museum community. The following are some elements associated with this term.

Workmanship should be in accordance, in every respect, with the best model-building practices. Hulls should be smooth, fair, and symmetrical; without blemishes, sap pockets, or tool marks, and should be scraped and sand-papered to smooth surface. Machined parts should bear no tool marks. Castings should bear no visible mold marks. In no case should glue alone be deemed sufficient to hold deck houses, fittings, or other appurtenances in place. Mechanical fastenings such as screws and pins should be used in addition to adhesives.

Models should consist of the whole exterior of the vessel from keel and appendages to the top of the highest fitting.

Running and standing rigging should be represented. Windlasses should be wound with appropriate line. Large windows should be indicated on the model by clear acrylic plastic. Ports should be transparent, and should have a hole bored behind them to give an appearance of depth. Gun turrets should have the openings in face plates required for elevation of the guns. Where required, gun shrouds should be represented.

Small boats should be mounted on davits or otherwise as actually carried and should show all details, motors, and equipment. If represented with weather covers, gripes and all fastenings visible are to be shown. Landing craft and whale boats should be without covers and should show all exposed details and equipment.

Propellers should be cast in bronze. If another material is used it shall first be copper plated and then brass plated. Fittings and accessories shall be of metal or other suitable material which will permanently hold its shape and will not deteriorate from temperature, humidity, light or chemical reaction with other parts, paint, or the atmosphere. Lead or lead-bearing compounds are not suitable for any component. No ferrous materials shall be used.

Painting of models shall receive careful attention. Special care shall be given to select compatible paints that demonstrate the best resistance to color changes, cracking, peeling, and fluctuations in temperature and humidity. All parts of the model shall have a surface treatment representing the appearance of the actual vessel if reduced in scale.

And another:

What makes a 'museum quality' ship model?

In the words of professional marine model artist Rob Napier, "a good ship model must give a compelling impression of the actual vessel." Although a subjective perception, experience and study of the three-dimensional elements of accurate models develops a strong impression of authentic naval architecture. Models speak a technical language - much like the written alphabet - based on scrupulous research. Nathaniel Herreshoff once said, "A poorly made ship model is nothing but a lie that deceives the eye."
A good ship model is skillfully crafted with suitable materials and constructed according to authentic maritime research and /or plans. The typical ship model from the Great Age of Sail (18 the & 19 the centuries) have four primary characteristics, all of which need to be consistent in craftsmanship quality: hull construction, paint work or finishing, metal smithing and rigging. As these characteristics are surveyed and interact, the model should provide the required "compelling impression of the actual ship."
From an aesthetic standpoint, a finely crafted and artistically presented ship model, like a fine painting, has a convincing presence or "aura."

In closing:

Remember, the three most important things that make for a successful modeler are patience, patience, and yet more patience. It is supposed to be a hobby, not a job.

Most Museums really don't have a strict standard for we call 'Museum Quality'. They go on a model by model basis. In other words, if they like what they see, they like what they see. As the lady in the Art Gallery said, 'I don't know art, but I know what I like'.

To quote the Ship Modelers FAQ:
'A museum quality ship model is whatever a museum director accepts for a museum collection'

See, crystal clear!

See also: What to Build?, Scratch Building Criteria, and American Marine Model Gallery

Some Museum Director may just consider this a Museum Quality Model (The SS Gloomph):

Modeler - Jack Moffett - on what to do with all those extra parts collected over the years!

This article was from a reply to a post made by Doug J, What exactly does ‘Museum Quality' mean?