What does "Content-type: application/json; charset=utf-8" really mean?

The header just denotes what the content is encoded in. It is not necessarily possible to deduce the type of the content from the content itself, i.e. you can't necessarily just look at the content and know what to do with it. That's what HTTP headers are for, they tell the recipient what kind of content they're (supposedly) dealing with.

Content-type: application/json; charset=utf-8 designates the content to be in JSON format, encoded in the UTF-8 character encoding. Designating the encoding is somewhat redundant for JSON, since the default (only?) encoding for JSON is UTF-8. So in this case the receiving server apparently is happy knowing that it's dealing with JSON and assumes that the encoding is UTF-8 by default, that's why it works with or without the header.

Does this encoding limit the characters that can be in the message body?

No. You can send anything you want in the header and the body. But, if the two don't match, you may get wrong results. If you specify in the header that the content is UTF-8 encoded but you're actually sending Latin1 encoded content, the receiver may produce garbage data, trying to interpret Latin1 encoded data as UTF-8. If of course you specify that you're sending Latin1 encoded data and you're actually doing so, then yes, you're limited to the 256 characters you can encode in Latin1.

To substantiate @deceze's claim that the default JSON encoding is UTF-8...

From IETF RFC4627:

JSON text SHALL be encoded in Unicode. The default encoding is UTF-8. Since the first two characters of a JSON text will always be ASCII characters [RFC0020], it is possible to determine whether an octet stream is UTF-8, UTF-16 (BE or LE), or UTF-32 (BE or LE) by looking at the pattern of nulls in the first four octets. 00 00 00 xx UTF-32BE 00 xx 00 xx UTF-16BE xx 00 00 00 UTF-32LE xx 00 xx 00 UTF-16LE xx xx xx xx UTF-8

Note that IETF RFC4627 has been superseded by IETF RFC7158. In section [8.1] it retracts the text cited by @Drew earlier by saying:

Implementations MUST NOT add a byte order mark to the beginning of a JSON text.

Dart http's implementation process the bytes thanks to that "charset=utf-8", so i'm sure several implementations out there supports this, to avoid the "latin-1" fallback charset when reading the bytes from the response. In my case, I totally lose format on the response body string, so I have to do the bytes encoding manually to utf8, or add that header "inner" parameter on my server's API response.

I was using HttpClient and getting back response header with content-type of application/json, I lost characters such as foreign languages or symbol that used unicode since HttpClient is default to ISO-8859-1. So, be explicit as possible as mentioned by @WesternGun to avoid any possible problem.

There is no way handle that due to server doesn't handle requested-header charset (method.setRequestHeader("accept-charset", "UTF-8");) for me and I had to retrieve response data as draw bytes and convert it into String using UTF-8. So, it is recommended to be explicit and avoid assumption of default value.

I exactly agree with @deceze but I want to develop this "I get an error from the service" part of the question,

We getting this kind of errors as http 415

Http 415 Unsupported Media type error

The HTTP 415 Unsupported Media Type client error response code indicates that the server refuses to accept the request because the payload format is in an unsupported format.

The format problem might be due to the request's indicated Content-Type or Content-Encoding, or as a result of inspecting the data directly.

In other words, such is seen in this example.

We have to set the correct content type and we have to accept the right content type as seen Add Content-Type: application/json and Accept: application/json. Otherwise, it will assume the default

RFC 8259 :

IANA Considerations The media type for JSON text is application/json. ... Note: No "charset" parameter is defined for this registration. Adding one really has no effect on compliant recipients.

Also,

8.1. Character Encoding JSON text exchanged between systems that are not part of a closed ecosystem MUST be encoded using UTF-8 [RFC3629]. Previous specifications of JSON have not required the use of UTF-8 when transmitting JSON text. However, the vast majority of JSON- based software implementations have chosen to use the UTF-8 encoding, to the extent that it is the only encoding that achieves interoperability. Implementations MUST NOT add a byte order mark (U+FEFF) to the beginning of a networked-transmitted JSON text. In the interests of interoperability, implementations that parse JSON texts MAY ignore the presence of a byte order mark rather than treating it as an error.

(emphasis mine)