Performance means, how smooth the game runs on your computer. You can identify this value by pressing F3 ingame, a FPS counter will show up in the top left corner. It indicates how fast the game runs. 60 FPS is the highest you can get, 30 is OK, but if the FPS go lower, you might experience a loss of smoothness in gameplay. This, however doesn't affect gameplay itself, just how it feels to you.
You can prevent these performance drops by understanding the rule that applies to them: The more objects are loaded, the lower the FPS will go.
Here are a few tips on how to improve your FPS:
- Disable "Offset maps". - To do this, load the game, open the menu by pressing E and go to "Options". Scroll down to "Offset maps quality" and set the value to 0. You can also set the value to anything below 100 to get a little performance boost. When setting it to 0 though, the game won't load and render maps outside of the map you are currently playing. This is totally fine since this is only ascetic.
- Enable "Fast graphics" - Go to the options menu as described in the first tip and go to the "Graphics" option. Set it to "Fast". This disables some animations and similar things so the game can run faster.
- Decrease "Render distance" - Go to the options menu again and the navigate to the option "Render distance". Set it to something low as "Tiny" or "Small". This option determines how far you can see. If you set this lower, then fog will cut of your vision earlier.
- Disable HD texture packs - Go to the main menu and click on the ContentPack button on the top right. Disable any ContentPack that might contain any HD textures. HD textures can decrease the performance because the game needs more resources to render larger textures.