Latency:
Latency is a simple, one-dimensional parameter that indicates the time delay between the input and output of a system. If a signal is input to a system, latency is the amount of time it takes for that signal to appear at the output.
Time Constant:
One of the basic laws of the universe is that many systems obey a first-order differential behavior. The rate of change of the state is proportional to the difference between the state and the input and inversely proportional to the product of the inertia and the resistance.
Since this is a cold winter day an appropriate example is a bowl of soup. If we heat the soup up and then remove the heat source the soup cools rapidly at first and then more and more slowly as the temperature approaches the ambient temperature. The larger the volume of soup the greater its inertia or "thermal mass". The better insulated the container the greater the "thermal resistance". A quart of soup in a thermos will cool much slower than a cup of soup in a metal cup.
Mathematically we write this as:
dT/dt = (T - Ta) / (R * C)
This is a linear, first-order Ordinary Differential Equation (ODE). The rate of change of the state (temperature, T), dT/dt, is proportional to the difference between the temperature and the ambient temperature (Ta) and inversely proportional to the thermal mass, C, and the thermal resistance, R.
We can obtain an explicit solution to this equation by integrating both sides and using some substitution tricks (chain rule). We end up with:
T = (Ti - Ta) exp(-t/(RC)) + Ta
At time t = 0 this evaluates to Ti, which is the initial temperature. As t -> infinity the exponential approaches 0 and T approaches Ta, the ambient temperature.
This is known as exponential decay. The rate of the decay is given by the time constant, R*C. The larger the time constant the slower the state decays. This time constant is often denoted by the Greek letter tau.
The basic form of exponential response is therefore written as:
y = A exp(-t/tau)
When t = tau the expression evaluates to y = A exp(-1) = A * 0.368. So we say that the time constant is the amount of time for the state to decay to 36.8%.
Many systems exhibit this basic behavior. A hockey puck sliding on the ice. The puck slows down rapidly at first and slower as it's velocity approaches zero. The greater the mass of the puck the longer it takes to slow down. The less friction (resistance) the longer it takes to slow down.
Incidentally thermal mass and thermal resistance are directly analogous to capacitance and resistance in an electric circuit and use the same symbols, R and C. One of the building blocks of electronic circuits is the RC network. It exhibits exponential decay with a time constant defined by R * C.
If we write the ODE for an RC circuit using Ohm's and Kirchoff's laws we get the mesh equation:
C dV/dt = (V - Vin) / R
Rearranging we get
dV/dt = (V - Vin) / (R * C)
which is the exact same form as our bowl of soup equation.
As we see latency and time constant are two completely unrelated terms.
The internet has given everyone a voice. So you have two choices: talk or listen. The problem is that many people want to talk but they don't want to listen. They spout nonsense and drop technical terms while being oblivious to what those terms even mean. If you don't understand the above, which is literally Differential Equations 101, then perhaps you should listen for a change.