When using certain DMX Controlers settting the fade option means it will gradually go through the DMX values from your set Starting point to the set ending point at the set fade time.
For example you have a 2 channel strobe on the first channel it controls the dimmer you set it to go from 0% (0 Value) to 100% (255 Value) by using fade.
the controller will then go at the set fade time1) :
etc etc all the way to 100% thus creating a fade effect.
The number of steps, (not programmed steps), it will take to go from it's starting value to it's ending value will depend on the amount of time the fade is given. i.e. the larger the fade time then the smoother the fade transition will be.
Use fade time to make your moving lights move from one position to another in a smooth and uniformed manner. Without fade it would jump (Snap) from position A to position B.