Yes, this is roughly how it is believed to work. In fact, one can make out neurons that are reliably involved in representing concepts like location and orientation [1], places [2] and persons [3]. Usually, multiple neurons are involved in representing single concepts (population coding [4] and distributed representations [5]). Concepts are constructed by successively extracting features and combining simpler features in more complex ones, from the sensory input regions towards the association regions in the cortex (see feature hierarchies [6]). You can visualize thoughts as population-rate coded probability distributions that interact very quickly in single "torrents" of activations.

[1]: https://en.wikipedia.org/wiki/Grid_cell

[2]: https://en.wikipedia.org/wiki/Place_cell

[3]: https://en.wikipedia.org/wiki/Grandmother_cell

[4]: https://en.wikipedia.org/wiki/Neural_coding#Population_codin...

[5]: http://psych.stanford.edu/~jlm/papers/PDP/Chapter3.pdf

[6]: http://www.scholarpedia.org/article/Neocognitron