DEFINITION
Lazy minting is a way of minting an NFT without having to pay upfront gas fees. In other words, this method allows someone to create an NFT for "free".
CONTEXT
Any transaction on the Ethereum network requires payment of a fee known as gas. Creating an NFT counts as posting a transaction to the network, and therefore requires gas to be paid.
While gas is a critical feature of Ethereum, high gas fees can disincentivize people from creating NFTs at all. Minting fees can be especially daunting for first-time NFT creators, who may not know whether anyone will be willing to pay for their work.
To solve this problem, OpenSea introduced lazy minting in late 2020, which requires no gas fee to be paid when creating the NFT. Other NFT creation platforms have since added support for the feature. (Update: OpenSea announced in 2023 that they will be deprecating this feature. Other platforms may continue to use the terminology.)
Lazy minting works by essentially creating the metadata for the NFT, without actually creating an instance of the NFT itself. Once someone purchases that nifty, it is then officially minted, and a gas fee is incurred. Typically, the fee is rolled in to the buyer's cost.
Lazy minting on OpenSea uses the ERC-1155 standard, which allows for the creation of many instances of an item, as opposed to the single-instance items supported by ERC-721.
Note that just because some platforms support lazy minting, the costs of creating and selling niftys may still not be entirely free. On OpenSea for example, the seller must pay an upfront network fee to create a "collection" before they will be able to mint an NFT, lazily or otherwise.