From The Art and Popular Culture Encyclopedia
In film and video, live action refers to works that are acted out by human actors, as opposed to animation. Live action is the norm in film and video, and thus the term is usually superfluous. It is an important distinction, however, in situations where one might normally expect animation, as in a Disney film, a video game, or when the work is adapted from an animated cartoon, such as the Flintstones or Josie and the Pussycats films, or The Tick television program.
The term is also used within the animation world to refer to non-cartoon characters. For example, in a film such as Who Framed Roger Rabbit where humans and cartoons co-exist, "live action" characters are the "real" actors such as Bob Hoskins, as opposed to the animated "actors," such as Roger Rabbit himself.