Yes, it is. We sometimes use the term here.
Vectorization is a valid term, but it's often reserved for when talking about tools (like live trace in Adobe Illustrator) that approximate vectors from a raster image automatically.
It's not so often used for the process of adapting, re-creating, re-drawing or re-interpreting a raster image as vectors, since calling this 'vectorization' can give the misleading impression that it's a purely automatic, "hit a magic button" process, as if we just press live trace in illustrator then say job done. But it is sometimes used to mean this.
Here's what Wikipedia has to say:
Vectorization (computer graphics), the process of converting raster graphics into vector graphics.
And you'll see the article focuses wholly on the automatic side.