Downtime is any time during the game where a given player cannot take actions in the game itself. The player may be able to forge political alliances or mind-game the opposing player, but as far as the rules of the game are concerned they’re a sitting duck.
Downtime is generally regarded by players as something to avoid, (who wants to play less of a game they enjoy?) but having downtime is not necessarily a negative quality to the game as long as it is utilized properly. Having downtime gives players an opportunity to calm down from the tension of the game, plan ahead, or just stretch their limbs. A long play session with no downtime will exhaust both players, and so it is very common to see games with long playtimes (such as professional chess) dedicate a very significant portion of themselves to downtime.
Similarly, downtime mustn’t necessarily be idle: in games such as Poker or Monopoly, downtime is still very exciting to the players because what the other players do on their turn, affects their own play. In Poker you might want to see how a player acts under pressure or look for any tells to spot their lies. In Monopoly, you want to see if someone else lands on your spaces to give you money. However, doing so does come with the downside of negatively affecting the previously stated positive of downtime: being able to relax. While you are still not quite as tense in these games, you can’t get up from the table at any moment and are expected to keep a general idea of what’s going on.