The art of tuning a website to deliver it's content quickly and efficiently to the user over a potentially low bandwidth connection.
Performance, when regarding websites, is normally divided into two main areas of optimization: back-end performance and front-end performance.
Back-end performance relates to techniques that improve the speed and/or overhead at server level, whether it be database queries (reducing the number of), or read/write requests.
Front-end performance relates to the techniques that are designed to deliver the content in the fastest way, using appropriate caching methods, leveraging concatenation of CSS and JavaScript to remove multiple HTTP requests and the like.
The majority of performance-related recommendations are outlined by Yahoo and Google on their respective performance best practice pages:
