An algorithm is said to take linear time, or $O(n)$ time, if its time complexity is $O(n)$. Informally, this means that for large enough input sizes the running time increases linearly with the size of the input. For example, a procedure that adds up all elements of a list requires time proportional to the length of the list. This description is slightly inaccurate, since the running time can significantly deviate from a precise proportionality, especially for small values of $n$.
Linear time is often viewed as a desirable attribute for an algorithm. Much research has been invested into creating algorithms exhibiting (nearly) linear time or better.