Perceptible latency has a strong effect on user satisfaction and usability in the field of human–machine interaction. In reliable two-way communication systems, latency limits the maximum rate that information can be transmitted, as there is often a limit on the amount of information that is 'in-flight' at any given moment. In communications, the lower limit of latency is determined by the medium being used to transfer information. The precise definition of latency depends on the system being observed or the nature of the simulation.

Therefore, every physical system with any physical separation (distance) between cause and effect will experience some sort of latency, regardless of the nature of the stimulation at which it has been exposed to. The magnitude of this velocity is always less than or equal to the speed of light. Latency is physically a consequence of the limited velocity at which any physical interaction can propagate.

Lag, as it is known in gaming circles, refers to the latency between the input to a simulation and the visual or auditory response, often occurring because of network delay in online games. Latency, from a general point of view, is a time delay between the cause and the effect of some physical change in the system being observed.

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