The Danger Zone is more commonly known as the "aggro bubble", the white translucent circle around your character on the radar. It determines when NPCs become aware of, and subsequently hostile to, their foes. Exceptions to subsequent hostility include most creatures with level 1-2 in starting areas, like Juvenile Bladed Termites in Normal mode.
In skill descriptions, earshot range is the approximate equivalent of the Danger Zone.
The Danger Zone is also important in that, as the only visual range cue on the radar, it can be used to estimate bow, spear, wand, and shout ranges.
- Some creatures, such as Kournan Spotters, have an increased aggro range and will cause their mob to move and attack you from farther away.