Yes, the NIC has the ability to do some processing onboard. On inexpensive NICs, this is very rudimentary (e.g. accepting/rejecting packets based on MAC address, maybe some checksum calculations). On more expensive server-class NICs, the NIC contains a full-blown embedded CPU of its own which is capable of offloading more of the work.
If the world isn't making sense to you, you're either drinking too much or not drinking enough.