Action describes how a bait moves in the water on its own, without you doing anything to it. A paddle tail has a hard, rhythmic thump. A fluke has almost no action of its own and relies on you to give it some. A curl-tail quivers on the slowest fall.
Why it matters
Action tells you how much work the bait does and how much you have to. High-action baits suit steady retrieves and dirty water where vibration helps fish find them. Low-action baits suit clear water and slow presentations where too much movement looks wrong.