I've spent a lot of my life involved in roleplaying games, whether it be via email or on a MUSH (Multi-User Shared Hallucination - basically a text-only world), freeform and story-based, or - gasp! - with statistics, mechanics and virtual dice. I've even run a few games in the real world, where my players quickly figured out I had no poker face, would make predictions about where things were going, and then watch me very closely to see if they were right. Grrr.
One of the concepts that is central to these games, particularly the MUSH sort, is the distinction between IC - In Character - and OOC - Out Of Character. What this really translates to, in general, is imaginary-world / real-world. For instance, if you were in the middle of writing a scene with someone and needed to run out, you might say: "OOC: be right back, grabbing lunch." It's a simple system to carry on a mundane conversation and also to coordinate the character (IC!) action.
IC and OOC are also used less commonly to refer to specific character actions and whether they fit the character. For instance, you might say, "It would be IC for my character to be very upset." For whatever reason, you rarely see OOC used in this fashion. If there is a mismatch, players are more likely to say, "That behavior isn't IC."
So what does this have to do with writing? I find this sometimes intrudes into how I regard the various aspects of a tale. The IC is everything that exists in the world of the story, even aspects that don't appear on the page. The OOC is everything in the writing that doesn't necessarily have a reality the characters would recognize: structural choices such as chapters and scene breaks, thematic elements, etc. Narrative style straddles the line: in most first person, it is an IC aspect - it's how the character talks or writes, after all - and in many third person stories, the choice of words and tone is influenced by the personality, knowledge and outlook of the character.
Old habits are hard to break, too: I am prone to thinking of mismatched character behavior as, sure enough, "not IC." It's a quick, easy shorthand that works in my brain and helps guide me away from choices that might serve the plot, but not the people.