My arabic isn't that good, but from what I know Qital means fighting. Surah 9 verse 29 begins with the word Qutilal. The translation reads: fight those. In which case, in verse 29 fighting relates to physical fighting.

However the importance lies in who this is aimed at and what the relevance of this ayat is. Now one of the scholar's notes states that the reason to fight is to put an end to the suzeranity of the unbelievers. Basically, what this ayat is trying to say is: you have two options: a system based on ignorance and a system based on the divine law. In this particular occasion, a muslim should fight for the system on divine law (aka Islamic law). However, the context relates to the time of the pagans (as shown in the tafsir link serene has provided). In other words, that ayat is for a specific time and place.