Victory dance
Victory dance refers to a now-obsolete skill training strategy. Prior to 0.9, any experience points gained from defeating enemies were put into a pool. This experience was then distributed to skills as they were used. The victory dance was the practice of repeatedly using certain skills to deplete the XP pool in a desired manner. If this was not done, eventually the XP pool would hit a cap, meaning that further experience would not go toward training any skills.
In 0.8 the XP pool cap was removed, meaning that victory dancing was no longer necessary simply to avoid wasting experience. In 0.9 the skill system was changed so that the experience gained would be immediately spent on skills, the spread (usually) being defined by the user, or by whichever skills were most recently used if automatic skill training was active. This change removed victory dancing almost entirely, but up until 0.10 it was still necessary to victory dance in order to gain the first level of a skill.
Necessity
The need for and ensuing annoyance caused by victory dancing were both often overstated. An "average" character would usually not find it terribly necessary to victory dance their main skills, e.g. a melee type would have no trouble maxing their main weapon skill without victory dancing, or a conjurer could easily max out Conjurations and an elemental school without much difficulty. Defensive skills (Dodging, Armour, Shields) would sometimes require some victory dancing to max out, but would usually also rise fairly high on their own. More difficult were ancillary skills; for example, a melee character who decided to learn Haste would find it necessary to victory-dance Enchantments rather excessively to get that spell up to a reasonable failure rate.
While it is true that the XP pool cap caused a lot of experience to be lost for the purposes of skill training, in actuality this was not a huge deal: this only happened to late-game characters, who would almost invariably have enough skills to survive anyway.
