Power factor is defined as the difference in phase between voltage and current, or simplified as the ratio of the real power (P) and the apparent power (S). People will often refer to power factor as leading or lagging.
The power factor is the ratio of real power used to do work to the apparent power supplied to the system or circuit. Power factors receive values between 0 and 1. When no real power is present, the power factor is 0. When all power is real and none is reactive, the power factor is 1.
Lagging power factor is when the current lags the voltage, this means that the current waveform comes delayed after the voltage waveform (and the power angle is positive). Leading power factor means when the current leads the voltage, the current waveform comes before the voltage waveform (and the power angle is negative). Unity power factor refers to the case when the current and voltage are in the same phase. Neither lagging nor leading.