Deary me this seems to have caused some controversy. Just cos I wanna join in, here's my thoughts on the matter.
The world of GTA2 is three dimensional.
In a game, 3 dimensions mean that there is a model, that can be moved and the 'camera' can move around it to get different views.
In a game, 2 dimensions mean that they have to manually redraw the object to get different viewpoints.
For example, this drawing of a dog by someone you may have heard of: Adolf Hitler.
If the artist wanted to make the dog look the other way, or see the back of the dog, he'd have to draw it again. Yes he could use the original image for reference, or trace some of it, but he would have to draw it again. He can't just look at it from a different angle.
This makes the dog 2 dimensional.
Now take this rather fetching statue of Josef Stalin:
If that brush dude wanted to have a look at the back of Stalin's head, he only has to move himself round the other side and he can see it. This is because this is a three-dimensional model rather than a two-dimensional image.
If you take a look at this screenshot of GTA2:
You can see that your perspective view of the buildings changes when you go round the side of them. This is because the buildings are three-dimensional models, like the statue. Your view of the cars do not change, they are static non-moving images, like the drawing.GTA2 = 3D game with 2D camera movement
It's kinda halfway between 3D and 2D, but it DOES use models rather than just images moving around on top of each other (like pacman, for example).