In one of Shadiversity's videos that he states that many people in the middle ages not just clergymen and nobles could read, but they're were not considered literate because they can't read and write latin and only read and write in their local langauge.

How true is his statement? Was a person in the middle ages considered literate, if they can read and write latin? And would they considered a person iliterate if they can only read and write in their own native tongue?