When a player or NPC takes damage, they might be able to avoid some damage through the use of blocking, dodging, parrying, and being missed. However, when an NPC is in a situation where they should not be damageable at all, they evade.
Evading occurs most frequently when a mob is leashing back to where it was before combat. During this time, the mob is running very quickly and regenerating health at a remarkable rate so it will have reset by the time it returns to its starting point. However, evading can also occur when a mob is "bugged," and can't interact with the world. Sometimes this is a pathing issue, and you can attack the mob from melee range where it can strike back, but not from range. Other times, it's simply in limbo, and you may as well just move on.