Downtime refers to game time spent doing things other than killing monsters, finding items, and gaining experience. Downtime might be spent chatting with a friend, identifying or crafting items, browsing the Auction House, fighting in PvP, or anything else that's not directly leading to greater in-game wealth.
Players seeking to increase their productivity (finding more items, gaining more experience, etc) seek to kill faster, and to minimize their downtime. Techniques for this range from not picking up as many items (to make fewer town trips and to spend less time identifying and selling items) to using movement skills to zip around the dungeons, to developing more efficient farming runs to not waste time in empty or underpopulated areas.
Not all players mind downtime, or strive to avoid or minimize it. Some players enjoy browsing the NPC merchants, go slowly to admire the artwork, chat to friends, upgrade gems, or just generally not rushing through the play experience. There's no one correct way to play the game, and players may vary in their desires and play style by character, or from day to day.
- See more reference terms.