Transaction which is spendable after a given time or blockheight is reached. These can be useful for a few situations, the most common two being...
Second layer protocols where the funds are locked up for periods of time often use locktime as a method to get everyone involved to co-oporate. This is often done by punishing the bad actor and making them forfeit their funds with complex use of locktime contracts.
Locktime can be used to put money in escrow, or on hold, until a given time. This way the coins cannot be used or moved until a provable, agreed upon time, or they can be released if a pending multi-sig contract isn't fulfilled within their given time. One example of this could be a trustless exchange between multiple people, where if either side fails to fulfill their side of the deal, the respective funds are returned to eah party.
* All terms and definitions may update as the Cryptionary improves.