You are basically right Tr1cky. They were testing the ability of the steam turbines to produce electricity as they were spinning down. The idea was to see if power could be maintained during an offsite power failure. To do the test the power level on the reactor had to be reduced to almost shut-down state. Unfortunately, the reactor did shut itself down...so to start it back up the operators removed almost all the control rods and shut down some automatic trip systems. When the reaction rate jumped, it was too fast for the operators to stop.
The russian RBMK reactor (chernobyl is of this type) is fundamentally different from US reactors, though. To not completely bore people, the end result is that RBMK's do not have negative feedback. In all US reactors, negative feedback causes reaction rate to decrease as temperature goes up. The reactor basically shuts itself down in emergencies.
While we are on the topic though, I just wanted to mention that there is a HUGE misconception about chernobyl. Most of you probably already know, but nuclear reactors are not bombs. They cannot cause nuclear explosions like bombs can. The chernobyl explosion was actually steam and hydrogen rapidly expanding and causing a pressure buildup that launched the reactor vessel lid through the roof of the building. (another key difference between chernobyl and US reactors.....no reinforced concrete containment building....chernobyl was just a regular factory with a reactor set up inside)