FPS, which stands for frames per second, is a common subject in a lot of questions and complaints. I'd like to take a bit to let you know how we think and talk about it.
What is a frame? The game runs in a loop, collecting inputs and network packets, applying physics and other state changes, and drawing the new state of everything in your display. Depending on what is happening it will take a variable amount of time to finish that one frame before starting on the next one. If you have vsync on, it may wait (if the frame took less than the vsync amount, usually 1/60 of a second)) to do the drawing until the vsync takes place. Vsync is a feature of your display and it is a defined time where the hardware can update the display without you seeing it until it's done.

Frames per second is a measure of how many frames were able to be drawn in the past second, usually averaged over longer than a second to give a smoother value. Again, the number will fluctuate depending on what is happening in the game (and possibly elsewhere on your computer).

The complicating part is that comparing FPS under different circumstances is not really valid. For example, which is a worse drop, from 300fps to 100fps or 20fps to 17fps? The way to compare FPS to FPS is to convert the values to how long a single frame takes at that FPS value. You do this by dividing 1000 by FPS to get a time for the frame in milliseconds.

300 =  3.33 ms
100 = 10.00 ms
--------------
-7.77 ms

20  = 50.00 ms
17 =  58.82 ms
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-8.82 ms

So if you guessed the 20-17 drop you were right.

The "ideal" FPS is 60 which corresponds to 16.67ms and matches the vsync value usually. This gives the best visual display if you have vsync on (no tearing). FPS below 20 is usually viewed as sluggish and is 50 ms.

Another aspect to FPS is stability. If your FPS averages to 60 but alternates between 100 down and 10 you won't like it much and will feel sticky. If your FPS stays between 20 and 25 the game will seem faster than it is.

If you play with vsync off and see FPS beyond 60 all you are doing is heating up your components for no actual gain and likely degrading the visual appearance due to the updating occurring at the wrong time.

Note that the game reads the state of keys and joysticks and mice at the frame rate. The frame rate does not affect how often packets are received from the network but does affect how often they are applied to the game.