“Data isn’t a robot, he’s an android!” An android is a type of robot and Mister “fully functional in every way” Data is just boasting that he has a penis. This is the same bot that thinks a herring is an amphibian and doesn’t believe his cat is sentient. 

Noonien Soong may not have bothered to teach his robo-son about categories and taxonomy but by god he made certain the guy could fuck