Yes, it is a prefix meaning a thousand.
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In math Kilo is the metric prefix meaning 1000 times.
The meaning is in the name: Kilo (1000) meter. A kilometer is 1000 meters, or about 6/10 of a mile.
"milli-" is a prefix that means thousandth. Not thousand, that is "kilo-".
"Subset" IS the math term in this case.
Let's remove the term "ton" from the words. Then we're left with Mega and Kilo. Mega is a shortened term for 1,000,000 and Kilo is a shortened term for 1,000. Therefore 1 Mega ÷ 1 Kilo = 1,000 Kilotons in 1 megaton.