Happens all at the same time. My guildmates and I will be on Teamspeak and we all say 'lag' around the same second or two when we notice it either from typing in chat box or trying to perform actions. You can still run and such but that seems to be governed by your client as I will be told im one place but on my screen ive run 100 yards away and eventually the character will zoom away from my guildmate and arrive where my screen shows as it catches up.

Once the massive teraforming projects were wiped last night there was almost no lag. The lag hits us all at the same time and my guess is that it is the system saving all the changes people make in the terrain, exacerbated by the huge teraforming projects some are attempting right now.