Columbus
Time decay is when the value of an asset decays with time. A car, TV etc bought today has lesser value next year whether used or not. The term depreciation is used when dealing with fixed assets. Whereas a plot of land increases in value with time (generally). As far as shares in a company are concerned, they can appreciate or depreciate with time as lots of other factors come into play.
When we come to futures and options time decay is there only for options and not futures. Assume Nifty spot at 4950 the futures may trade at a premium/discount of 10 points. The 4950Ce and PE will trade at around 130 each. As time passes and we end the series, suppose the spot after going all over the place ends at 4950 only. The futures end at 4950 too on expiry day. Whereas the options which had value of 130 each become zero even though the underlying has not moved a point. This is time decay.
In many sense people prefer to trade in futures to avoid time decay. In the last example, if they had expected NF to go to 5200 and bought at 4950, at the end of the series if they still hold the view of touching 5200 they can 'rollover' into the next month at no extra cost except the brokerage. The options buyers have no such choice. They have to pay the premium again and take a fresh position. Options sellers (like AW10
mint their moolah because time decay is on their side.