A delay. Without more context, “latency” will refer to the time between moving, and having that movement appear represented in the VR environment – on the screen. Low enough latency goes completely unnoticed while high latency is a major cause of motion sickness. Causes of Latency include tracking time, computer processing time (i.e.: game physics), graphics rendering time, screen refresh rates, and more.

The other common context you will hear the term “latency” is in controller input. Latency is a concern, these days, with hand-tracking solutions. Controller/button latency tends to be pretty low.

Display Latency in VR is bad, and should be minimized as much as possible. It is a source of headaches and motion sickness.