Your perceived "lag" is determined by both your ping and your frame rate.
  • Your ping, or latency, is the round trip time for a data from the client to the server and back is what we call ping, measured in milliseconds. A ping of 150 means that it takes 150 milliseconds to send a message to the server and get one back. A slow ping will mean it takes longer for you to see the result of your action initiated on the client.
  • Your frame rate is determined by the speed of your hardware, both processor and graphics. Technically, more players could lower your frame rate because we have to draw more, and the other players would be casting spells which could lead to a lot of graphical effects on screen, but it's really negligible (since we're really adding one more character to 20 characters already on screen). A slow frame rate means the world updates fewer times per second (chugs).
The best situation is a low ping and a fast frame rate. It's possible (and normal) to have a low ping and a low frame rate, or a high ping and a fast frame rate.

Bottom line is, you can't affect their lag and they can't really affect yours.

-ALS