Stuff like flowing liquids and texture updates (basically block updates) can cause an entire chunk to resync to the clients and rebuild the render cache for that chunk. That's a lot of overhead for both the server/client and network (and the reason the 1ms>timers and RP in general lag so much). Though there have been some improvements in Forge to reduce this. It still an issue though.
Entities are another common source of lag, whether they are items, animals, or minecarts. Get enough of them and the server just gives up and dies.
Entities are another common source of lag, whether they are items, animals, or minecarts. Get enough of them and the server just gives up and dies.