Is this really a latency issue? Or just a failure to understand the mechanics of how the aoe system works in this game?

The game determines if you are "in" the area by your position when the casting bar is 100%. It has nothing to do with the actual animation of the attack itself which is often times take a second our two and then damage is applied afterward. So yes, you may be a mile away from the aoe by the time the animation finishes, but if you were in that area when the bar was full then you will be hit.

If you understand and follow this rule, I don't see how you can go wrong. As a tank I've learned this lesson well and can even use it to my advantage. e.g. I can move out of an aoe well before its finished casting and then move back into the aoe while the animation is going off to prevent the mob from turning.