Articulation commonly describes the number, position, and type of a toy's joints. "Posability", a fan-coined contraction of "pose" and "ability", is often found in conjunction with mentions of articulation, although they are not necessarily in interchangeable.
The more joints on a figure (in either form), the more articulated it is. This generally includes the shoulders, elbows, hips and knees, and sometimes even wrists, ankles, and neck among others. Posability in Transformers ranges from the Spy Changers, who are limited to rotating their arms up and down (shoulder swivel articulation only), to the non-transforming Revoltech line, the entire selling point of which is the high amount of articulation per figure. Possibly the only Transformer toys that have no real articulation but can still be said to transform, are the Battlechargers, the Throttlebots, Under-3, and arguably Freedom Fighter and Enemy.
Articulation is one of many factors that fans weigh when evaluating a toy, and naturally is of subjective value. To some, if a toy has unusually good posability, they will buy it over another figure that looks "better", but can not move as much. Toys with very few points of articulation are often referred to as bricks. Many modern Transformer toys, particularly those from the Beast Era and Robots in Disguise, have high posability thanks to the incorporation of many ball joints.
Unfortunately, there is a tradeoff between articulation and production cost -- the more complex the figure, the more parts that must be assembled and therefore produced, and the higher the retail price. For example, Armada Megatron could easily have been given knees, but instead has a plethora of other gimmicks. Many kitbashers have taken to altering the figure to be more posable, and while some fans claim this is how Hasbro "should" have made the original, doing so would likely have sent the figure over budget.
Some figures are hampered in how well they can pose by their transformation or altmode. Armada Hot Shot's shoulders, for example, are limited by how he transforms. A different transformation may have allowed his arms to move on an additional axis... however, as noted above, this would have also increased the toy's complexity and cost. Even when the needed articulation is present, posability can also be limited by kibble blocking a part's motion.
Conversely, sometimes a toy's posability is improved by its transformation. Or, perhaps more accurately, the designers managed to place the transformation-related articulation in places that would also serve the robot mode's articulation. The Unicron toy released during Armada is an example of this. His neck, shoulders, arms, wrists, hips, ankles, and feet must all be moved to change him from planet to robot and back.
Articulation can have a drawback. If a figure is overloaded with joints, especially in the legs and waist, this can result in the figure having problems supporting its own weight, holding a pose, or even standing. This is a common complaint with Omega Prime. He is loaded with exciting and dramatic articulation, but is so top-heavy that it is hard to get him to do anything beyond "standing up straight." The much-loved ball joints are especially susceptible to weight and play wear problems, and as such are generally not used on larger figures. A similar level of flexibility can be created with a combination of two swivels or ratcheted swivels.