Time in Dwarf Fortress can be a somewhat complicated subject, but learning the ins and outs of the system is essential for modders and can be of great use to players, as time tracks everything from syndromes to crop growth.
Time is measured in unnamed units, which are commonly referred to as "time units" or "ticks." Time units are equal to different lengths of time, depending on the game mode.
In fortress mode, there are 1200 time units in a day; in adventurer mode, there are 86400 time units in a day. Thus, a dwarf in adventure mode is capable of moving, fighting, and interacting 72 times as fast as a dwarf in fortress mode assuming the same statistics. Assuming 24 hours per day, 60 minutes per hour, and 60 seconds per minute, this means that a time unit lasts 1 second in adventurer mode and 1.2 minutes in fortress mode. Regardless of mode, there are 28 days in a month and 12 months in a year.
In fortress mode, there are 403200 time units every year. At 100 fps, it would take just over an hour in real-time to play through one year.
The amount of time it takes a creature to move, fight, or interact is directly proportional to its speed and inversely proportional to its agility and its strength. All creatures with default speed, regardless of their strength or agility, take between 5 and 16 time units per orthogonal tile traveled. Diagonal tile travel times are 362/256 times that amount, so they take between 8 and 23 time units for creatures with default speed. Median dwarves take approximately 10.5 time units and 14.9 time units to travel orthogonally or diagonally respectively. Triggered devices can be affected by delays of up to 100 time units; see lever.
Syndromes use time units. A syndrome that lists its effect as starting at "5" means that for all but the fastest characters, you will begin feeling the effects as soon as you take a step. "50" means 50 time units (or about five steps), and "500" reliably suggests that you'll be able to stagger all the way back to the hospital before your brain pours out of your ears.
Plants use a tag called GROWDUR. The GROWDUR value is generally set to 300 or 500, which is actually 30000 time units or 50000 time units. One growdur is equal to 100 time units.
Vermin in hives which produce items (namely bees which produce honey) have the HIVE_PRODUCT creature token, whose second parameter is the number of time units it takes for a hive to produce the product.
 Lifespan and Development
Based on the fact that pressure plates take 100 steps to reset, some people have built various time-keeping devices to do various things around the fort, like flooding a trap once a month, or just for fun.