To make it short and sweet, there are two basic ways to make what we call "fried chicken". One uses a lot of oil, and one uses only a couple of tablespoons of oil or butter. One ends up with chicken pieces with a crisp and light exterior; the other ends up with tender pieces of chicken that is more oily, but tastes nonetheless delicious.
It might seem ironic that the way to get the lighter, more crisp exterior is to use a lot of oil, but cuisine, like life, is filled with ironies.
My Mom used to make fried chicken by rinsing chicken pieces, dredging them in seasoned flour, then frying them in an inch or two of hot cooking oil in a big electric skillet. The skillet was set to about 375°, and the cover was left off. It took about twenty minutes, and she turned the pieces once. The result was chicken encased in a savory, crisp, golden brown shell.
Technically, she was pan frying the chicken. In essence it was no different that deep frying, except the food had to be turned once during cooking. The oil was so hot that, on contact, it converted water in the surface of the food immediately to steam. The steam created a barrier between the oil (ideally 375° or so) and the chicken (which you wanted to end up around 170°). The lid was kept off to allow this steam to escape. When done, the outside would be golden brown, the inside perfectly done.
Not much oil soaked into the coating if the chicken was cooked right. This is because of the steam, working it's way out of the food. If you let oil cool too much, or put food in before oil is hot enough, then yes, in fact, the food will get oily.
In years to come I learned another way to make "fried" chicken. You use a lot less oil -- as little as two tablespoons of butter, or oil. You add the dredged chicken and cook it, over medium to low heat, with the cover on, for as long as 45 minutes. The low heat lets the oil mingle and interpenetrate with the coating of the food -- but remember, there is a lot less of it. Keeping the cover on captured the escaping steam, forced it to condense, and drip back into the pan, where it turned to steam. By leaving the lid on and keeping the heat low, the chicken was in fact basting as it cooked, the moist steamy environment cooking the chicken with low heat, moisture and time -- three of the four elements that define braising.
This cooking method is a hybrid method, not really easily defined in the structure of classical cooking methods. It isn't proper frying; the low heat and tight cover prevent that. It isn't really braising -- it isn't cooked in liquid. It's isn't sauteeing -- sauteeing is small pieces cooked quickly over high heat. Perhaps, if you had to place it in the taxonomical heirarchy of cooking, you could call it a "braise-fry".
A rose still smells as sweet, they say; what it's called is a lot less important than how it works. I think it works very well indeed. True, the product is slightly more oily than the "deep" fried method, but not much. (In fact, you end up with more oil in the pan than you began with -- the result of fat in the chicken skin rendering out). The chicken itself, however, is extremely tender, and very savory. It's quite a delicious way to cook chicken. Also, you can easily make a gravy to accompany the chicken when cooked this way.
What's interesting, is that some people use one method, some the other, and everyone just calls it "fried chicken". KFC (formerly Kentucky Fried Chicken, before PepsiCo decided to hide the word 'fried' from the title) uses the "braise-fry" method with a unique twist: Instead of a tight fitting lid, it's actually in a pressure cooker. Their chicken is incredibly tender, and unbelievably greasy. Take out deli's, by and large, hand over deep fried chicken -- a thin, crisp coating and middling-tough chicken. Batter fried chicken is, of course, deep fried.