Dictionary.com differentiates between two versions. It refers to the anthropological aspect, which is of art work depicting the erect penis. Then, the second one, refers to the anatomy, which it defines as being an erect penis, soft penis, or even the woman's clit.
Phallus worship has been a part of society for millennia. and it's always of the erect penis. There are no statues of the limp penis in ancient Greece, etc. I think this was what Mrs. Candy was trying to get at.
In Freudian psychoanalysis, "phallus" is actually a woman. I think Freud said that women were the "phallus" and men strived to possess the phallus.
Still, for Mrs. Candy's purposes, I think she should've just used the word "penis." When she says "phallus," people tend to immediately think of "erect penis," which makes it sound like she is sayin, "Men shower together so they can see each other's erect penises." I don't know about you, but seeing an erect penis in the gym or school shower was always a rre site. I've seen two in my entire life.
NO, Dictionary.com also refers to it as the representation of the human male penis.
See for yourself:
phallus - Definitions from Dictionary.com
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