For understanding some philosophers, it IS critical to get a precise definition of terms. That often isn't the case with Dennett, he generally uses words a bit imprecisely, more like a normal conversation, than like a math proof. That there isn't a single, precise meaning to "intentionality" is actually readily observed from the way he applies it across multiple authors, who are writing with very different objectives and in different modes. Dretske discussing the nature of "error", Kripke on "rule following", Millikan's discussions of function, the intentionality assumed in biochemistry, the intentionality assumed in evolutionary biology, Searle discussing the critical differences between syntax and semantics -- this diverse subject set CLEARLY cannot all be operating off one common meaning of "intentionality!!!
Hence your question -- what is Dennett REALLY talking about? One key to understand this is to recall that US philosophy of mind was dominated by behaviorists for about a half century -- so that when one tried to discuss the mental -- the vast majority of philosophers insisted that one could not actually reference anything INTERNAL. There were a few decades following the behaviorist domination that were similarly dominated by functionalism, where one could reference internal events, but only "functionally". Dennett was writing while functionalism was still in domination, so philosophers actually trying to discuss consciousness are going to often use code-words, or else make an effort to pretend that function == consciousness. One such term often used was "intentionality" or "an intentional stance". Under modern reading, one should generally translate this into a debate as to whether we are conscious or not.
Dennett effectively argues "not", by embracing functionalism wholesale. IF one functionalizes "consciousness", into "intentionality", then it is actually pretty clear that Dennett has the right side on this. Complex enough Robots can do ANY function! And there is not any indication of a critical threshold of complexity of function (some TBD emergence principle) that causes "magic" to happen with only some complex functions, such that they are "conscious" and other functions are not. And it is certainly true that "intentionality", if it is defined purely functionally, can be assigned to quite simple functions, such as that performed by a "two-bitzer". So, Dennett is pointing out that strict functionalists about consciousness, which most of his contemporaries were at the time, should either ascribe consciousness to all functions, or to none.
Functionalism has since gone into partial decline, as many advocates of it were not willing to accept the conclusions Dennett argued for here. It is also now acceptable to admit that we can and do have internal evidence of consciousness -- IE that we have qualia, and perceptions, and we actually do have personal and privileged access to this information. The plurality of philosophers of mind today have fused functionalism and qualia with an acceptance of a TBD emergence process by which complex functions somehow generate consciousness, so that they remain "physicalist" at least in the origin of consciousness. By accepting emergence, this would then be a non-reductive physicalism.
Dennett, who is committed to reductionism, refused to accept this compromise between physicalism and real internal experiences (in other writings is becomes more clear why -- he thinks all such models end up being dualist). Emergence was mostly frowned on at the time of this essay, but it has since become pretty widely accepted. Most of the rivals he was attacking in this essay went on to adopt an emergentist approach to consciousness, and become explicitly non-reductive materialists.