Action can mean different things based on its context. In screenwriting, "action" paragraphs, also referred to as "description" paragraphs, are where the writer describes non-talking events that the audience is seeing and/or where the writer describes characters and what they are doing. It's best to describe just what the audience can see and hear.

During production, "Action!" is the the word called out, typically by the director but sometimes by the assistant director or even line producer, at the start of the current take to alert actors and crew that the performance is starting.