What is a bandit?
One of the debug stats is "bandits killed". I originally thought they were just NPCs, but I recently encountered one (and died), and it seems to be a player.
What are bandits?
Solution 1:
Recent updates have made the bandit skin and humanity meter obsolete, but the community still identifies any player who robs or murders other players for their items as a bandit.
The DayZ wiki has more information.
UPDATE: Since writing this answer, I've been following the forums and other info sources closely and learned more.
Despite that the humanity meter is no longer shown and skins no longer change, everyone still has a humanity score under the hood. You can still determine if someone is a murderer by looking at them. Your avatar's heart beats loud and fast if they have low humanity. This method is effective from any range.
Rocket has stated that humanity will eventually be a greater factor in gameplay once again, but it isn't clear how this will play out exactly, or whether it will be in the mod or just the standalone game.
Solution 2:
As far as I can tell you're correct, bandits are players.
This forum post here tells you how to unlock a skin that identifies you as one
"Humanity" meter. When you kill enough people, it goes to zero, and you get the Russian
VSK skin to identify you as a bandit.
There's also a lot of talk on this forum post about the Bandits. Humanity doesn't reset upon death, but it does regenerate over time.
Solution 3:
Bandits are simply players who kill other players for their gear. They usually will be around high-value locations like the NW airfield, or a heli crash site.
Solution 4:
Players who shoot people on sight. My advise to handling bandits is to kill them on sight even if that will make others think you are a bandit. Better you than them.