Area of Effect or AoE skill refers to a skill which has an effect on multiple targets within a given area. AoE skills can be highly effective when dealing with multiple mobs in a small area, provided they can be quickly killed, as all mobs will aggro to the caster.
Area around Caster[]
Skills that fall into this category affect an area a specified distance around the caster. These skills affect multiple targets with the area. For example, the 
<Seismic Wave I> skill for a Gladiator damages enemies within 7 meters.
Area around Radius of a Target[]
Skills that fall into this category will have a specific target and also affect surrounding targets. For example, the Spiritmaster's 
<Sandblaster I> skill damages a target 25 meters away from the caster, and all enemies within 15 meters of the target. Another example, 
<Marchutan's Light I> for a cleric will heal the target within 25 meters and six allies within 25 meters of the target, not just group members making it effective in fortress defenses.