Aura is a type of skill used by certain Unique Monsters and Paladins (some Druid skills effectively work like Auras as well). It passively affects either the caster and all nearby allies, or all nearby enemies. There are two types of Auras: Defensive Auras and Offensive Auras. Generally, Defensive Auras affect allies, while Offensive ones put debuffs on foes.
An example of an offensive Aura is the Holy Freeze Aura, which slows any affected target and inflicts Cold damage. An example of a defensive Aura is the Paladin's Resist Lightning Aura, which increases the Lightning Resistance for the Paladin and all party members.
A single target may be affected by more than one different Aura, though, obviously, only one graphic will show. Similar Auras will not stack, a weaker one being suppressed.
An Aura is a semi-Passive skill, in that it usually requires no Mana (although Prayer drains Mana over time while active), and can be kept on as long as possible. In return, Aura is only active while focused, occupying the RMB skill slot, and is dropped immediately when switched. Only one Aura of any type can be active per Paladin at a time.
Some Auras provide a minor passive bonus when inactive; an example may be Resist Fire, which still increases the maximum (not current) Fire resistance by half of usual value even when turned off or replaced with a different Aura. Many Auras also synergize with other skills, enhancing the Paladin's attacks even when turned off.
In general, a single caster can only have one Aura active at a time. However, if an Aura is granted by an item or a Rune Word, it will still be active even if item wielder has another Aura.
Unlike Auras, these skills have both passive and active effect, providing a bonus that can be greatly increased for a short time by manually activating the skill.