The term is often used, misused and abused, so it kind of depends upon who's saying it

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But the classic textbook definition means that it's an effect or an edit that takes place "on the fly", in the time in which it happens; i.e. in "real time". Turn the reverb on and it's there, turn it off and it's not.
Versus non-real time, which is something that has to be renderd (generated) and saved before it can be used, because the amount of time it takes to generate it is longer than the effect itself (e.g. if it takes 1.5 seconds to generate a 1 sec effect.) When the computer just can't keep up with the live stream of audio or video and generate the effect on the fly, then that effect needs to be rendered seperately and added in later.
The faster computers get, the more sophisticated the audio or video effect can be executed in real time rather than having to be rendered off-line first.
G.