Apply lag
Also called: replay lag
Apply lag (replay lag) is the gap between WAL a standby has received and WAL it has actually applied. On a healthy replica it's tiny; on a delayed standby it's held large on purpose. You can see it as the distance between pg_last_wal_receive_lsn() and pg_last_wal_replay_lsn().
What this means
The gap between WAL a standby has received and WAL it has actually applied. On a healthy replica it's a sliver; on a delayed standby it's held wide open on purpose. You read it as the distance between "last WAL received" and "last WAL replayed."
Why it matters operationally
Apply lag is distinct from receive lag: a standby can be fully caught up on receiving WAL (no data-loss risk) yet far behind on applying it. Read queries see the replayed state, so apply lag is what determines how stale a replica's reads are.