What does Packets / Packet Loss mean

This is referring to your internet connectivity.

Information is sent over your network in little segments, or "packets".

In this particular instance, this is a test to check the integrity of your connectivity. It sent 12 packets, and all 12 packets were received, meaning that there was 0% loss - therefore no issues with your internet.

To get a little more technical, this process is used to test the integrity of your internet connectivity to ensure that your inputs from your PC are received on the game server. The way this is done is through the use of TCP/UDP (by default, UDP being the standard) to send the information from your PC (Your IP Address) to the Server and back again.

While things such as Internet speed and Bandwidth can affect your ability to play (low speeds or bandwidth can cause latency - a delay between the send/receive) Packet loss is different. Packet loss is whether or not the information you sent is received by the server, and vice versa.

A good analogy of this is a freeway. Imagine lots of cars travelling back and forth on a freeway. Each of these cars represents a "packet". This freeway is the Internet. When you connect to the internet, you create an entrance/exit to the freeway.

When you download things, or receive information from a server, these cars will turn off the freeway to your exit. If each car represents, say 250MB (in reality they can't be bigger than 65,507 bytes), and you download 1GB of information, then 4 cars will turn off, each reaching you one after the other. The potential that sometimes, due to multiple downloads and uploads happening, this can confuse the instructions, or some cars may simply just "fall off", due to communication errors.

@Ben's answer is correct. I'd like to explain how packet loss occurs and how it affects you.

When two computers communicate, they essentially send "packets" to each other. Sometimes, a packet never reaches its intended recipient. That's a "packet loss".

Packet losses can happen when the line between both computers is damaged, or when any of the devices between the two is overloaded, such as when there is too much traffic and the router has to ignore a packet or two.

How does it affect me?

If you're streaming, packet loss can manifest in a loss of quality. Missing packets means missing information, which can cause frame skips, audio skips, or glitches in the video.

Not all streaming services are affected by the above loss of quality. If you experience packet loss on YouTube, it's much more likely that your browser will say "I didn't get that package", and the server will simply resend the packet. Which leads us to the next point:

Packet loss usually affects connection speeds. Ideally, your PC sends a packet, and receives a packet in return. When a packet is lost, it has to be resent. Imagine if two people are talking, and one asks: "what did you say?" Obviously, the other party has to repeat himself. As long as it doesn't happen often, all is well. If it does happen often, however, the communication speed could slow to a crawl.

Packet loss is especially bad if your ping is high. A high ping means it takes longer for your packet to reach the intended destination, and for a response packet to come back to you. If you have a ping of 1000 milliseconds (1 second), each packet loss means you have to wait 1 additional second for the response packet to arrive. With a ping of 100 milliseconds, you could afford 10 packet losses in a row for the same effect.

In a game like Fortnite, a packet loss usually causes lags due to a sudden increase in ping. Even if the game doesn't request for the packet to be resent, it still has to send a new packet and wait for a new response.