Refers to a spell or effect that affects all targets within an area. The area is usually a circle, sometimes a cone or arc, around the caster or the target.
This should not be confused with Area of Effect (AoE), which is an expression of the shape or size of the effect. These terms are often used as if they were synonymous.
"The mob casts an AE attack which hits everyone in a 20' radius AoE."