Leeching is the act of benefiting from the effort of others, without making any contribution of your own.
In PvP, leeching is almost always considered a form of poor sportsmanship because the free riders harm their partners' ability to prevail against their opponents. In PvE, leeching is sometimes encouraged, e.g. raptor farmers often invite others to come along to earn points towards the Asuran title track.
PvP players leech by avoiding combat. In order to escape notice, leechers will often move about and occasionally use a skill or two. These players will end up earning the same amount of faction as those actively participating and yet make it more difficult for their team to win, because they force the team to compete with too few players.
The Rules of Conduct specifically prohibit this type of behavior and players can choose to report those who leech; punishment usually involves receiving the Dishonorable hex, which prevents the player from participating in PvP for a period of time. For details, see Dishonorable Combatant System.
There are a couple of ways that PvE players can leech: