I think the revived series has made it very clear that the term "Time Lord" refers to any and all members of the Doctor's species, not to an elite few Gallifreyans.
And so the Shobogans from "Invasion of Time" are still Time Lords, then?
The fellows from outside the Citadel are not Shobogans. Shobogans are clearly mentioned in The Deadly Assassin as being vandals and hoodlums inside the Citadel. That term is never used in The Invasion of Time. The group of people outside the Citadel in that episode are only ever referred to as "Outsiders", as I recall.
^ But as we know, there are inhabitants on Gallifrey who weren't. The primitives that lived outside the city.
Those that lived outside the Citadel were not "primitives". They were Time Lords who abandoned the Time Lord lifestyle to "return to nature".