For me lag can mean slow build up of the surroundings (a lot of grey), repeating digging because stuff reappears and a low FPS amount making me move very shakily.
Since 0.4.3 I noticed that in a vanilla non-server game my FPS was around 15. My 'viewing-range' normally was 135. Decreasing it to 45 doubled it to 30, enough to walk around normal. Increasing view push: <shift> and + , decreasing push - (minus sign)
The first two can be caused by a lot reasons: not enough processing power, not enough memory, or a weak or an old built-in graphical card, not up-to-date drivers, in server games a slower server, long distance, anti hack measures (someone told me) etc.
You can try to minimize some features in minetest.conf. This post might help you with it:
http://minetest.net/forum/viewtopic.php?id=3197