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In terms of network latency this can be defined by the time it takes for a request to travel from the sender to the receiver and for the receiver to process that request. In other words, the round trip time from the browser to the server.
Latency is important when someone is directly interacting with another computer, as the amount of lag between the two computers can make some tasks very difficult (such as editing a file). Bandwidth, on the other hand, is not concerned with latency. When downloading a large file, it may be perfectly acceptable to have a 3-4 second wait before the file begins to download. Networking latency is the time it takes for a single packet to go from your computer, to another host and back. Latency is generally measured in milliseconds.