x% increased Area of Effect radius
If a skill has more than one AoE, all of them will be affected. For instancehas two areas of effect, one which defines the area that the fireballs can fall in, and another which defines the area in which the individual fireballs deal damage. Using Increased Area of Effect with will result in larger fireballs, but spread out over a larger area.
If this gem is linked to a skill that creates a minion, totem, trap, or mine, gem will increase the radius of any AoE skills used by the summoned ally. For instance if a Necromancer is raised as a spectre, any curses it casts will have a larger AoE. Monster auras on rare monsters are not skills, they're an inherent property of the monsters, and will not be affected by this gem.
The gem will not affect the trigger radius of a trap or mine, or a totem's range.