Your lag is occurring on your computer, meaning your commands are not registering over on their system for some reason. The mobs are all processed/handled on theirs. Thus no lag on their end.
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Yeah, that's true.
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But even that last part's not true. You know those times when the mob's running toward you and you notice them running right past you for a while. Then suddenly POOF! They're back in front of you ?
That's lag on their end, but not yours.
Not so true.
True that there's 2 types of lag:
1) Your computer might lag. Everything seems to stand nearly still and frame rate drops.
2) Network lag. Communication with the server is too slow or temporarily disrupted.
When mobs run past you, and suddenly jump back to face you, it's due to network lag.
The client is coded to "mask" minor network drop outs, and simply predicts where the mob would be if it continued in same direction and same speed. Because of network lag, the server can't tell your client that the mob stopped in front of you and attacked you.
When the network works again, the mob position is updated, and the client is informed about hits and other things that happened mean while on the server side.
If the client was coded smarter, if would already know that a mob aggroing on you, would stop and attack when it reached you. But it's not. It's only smart enough to let the mob continue at it's path.
Theoretically there is a 3) Server lag too.
I suppose that could happen a LGs and other similar situation.
But my personal theory is, the game is just not stable enough to let us notice, since it usually crashes long before severe server lag can build up.