Latency is the time it takes for data to travel from one point on a network to another, usually measured in milliseconds. For example, if a server in New York sends a packet at 04:38:00.000 GMT and a server in London receives it at 04:38:00.145 GMT, the latency on that path is 145 milliseconds.
The biggest cause is physical distance: Cloudflare estimates a request from about 100 miles away arrives in roughly 5 to 10 ms, while one from about 2,200 miles away takes closer to 40 to 50 ms. Each network and router a packet crosses adds a few more milliseconds. Round trip time (RTT) is about double the one-way latency, and latency is different from bandwidth, which is how much data can move at once, not how fast it arrives.
Source: Cloudflare Learning Center: What is latency?
Image: Ethernet cables in a network switch, by Raysonho, CC0, via Wikimedia Commons.