I looked up "how to make a yo-yo"
I think one of the big differences is that the raw edge is turned in/down and THEN the basting/gathering stitches are sewn in.
So when the threads are drawn up, the edge is "finished" around the hole
http://www.quilterscache.com/Y/Yo-YoQuiltingBlock.html
This explains/illustrates what I've thought was a yo-yo