> `electric-indent-mode` says that in does "On-the-fly
> Reindentation".  What does that mean, and how is it
> different to normal indentation?

(What's "normal indentation"?)

The doc string says that the mode does this, which
is presumably what it means by hand-waving with
"on-the-fly reindentation":

  this reindents whenever the hook `electric-indent-functions'
  returns non-nil, or if you insert a character from
  `electric-indent-chars'.

The Emacs manual, node `Indent Convenience' says:

  Electric Indent mode is a global minor mode that
  automatically indents the line after every <RET>
  you type.

If you feel that these explanations aren't clear
enough then please consider filing an enhancement
request to clarify further: `M-x report-emacs-bug'.