This is a question I am asked quite often. Steeping involves letting an e-liquid age to allow the flavors to mix, blend, ripen and mature, much like a fine wine gets better with time. Steeping time can last anywhere from a day to three or more weeks for maximum flavor richness.
Steeping will not magically transform a flavor that you just don't care for, but it will enrich and deepen one that you love or improve a flavor from good to great. The balance of flavors in an e-liquid can also change over time, making one taste come to the front while another becomes more delicate. Steeping generally makes a flavor richer, deeper, more luscious. The difference can be subtle, but worth it! If you have a flavor that you love in a larger bottle size, you may notice that it seems like it just keeps getting better over time. This is the magic of steeping!
A few steeping tips: in my experience, selecting a blend that contains PG can lessen the need for steeping because propylene glycol is a better flavor carrier than VG. 100% VG e-liquids will benefit more from a couple extra days to steep.
To steep or not to steep is really a personal choice. Most of my flavors taste good right out of the box. If you like the way a flavor tastes, go ahead and use it! But if you can give it a little time, it might just get even better!