My definition of latency for a martial artist is:
Latency is a measure of time delay experienced between the sensory observation of danger and the correct physical reaction.
Sensitivity: By this, I mean two things. The first is the ability to read situations and people's body language. If you are aware that you are angering someone, you can change your approach or walk away before the conflict becomes physical. The second is in a physical conflict, where you should be able to use all your senses to observe your opponent's state. This will give you the important information to end the conflict.