The "Action RPG" genre is the current trend in the RPG industry; the issue with it is that contrary to its name, it is not representative of the main experience of the game. Consequently, it can be confusing both for developers and consumers to simply describe an RPG as an "action RPG." Let's take a few games that have all been described as action RPGs as examples:
So all those games have completely different goals for their main experience, and as such would appeal to different type of players, but still they all have been described as action RPGs. That's an issue because action RPG is not a real subgenre; instead, it's simply the current marketing slang for "it is cool to play it on consoles."
In term of mechanics, it usually comes down to one of two things (and sometimes both!):
And that's usually it, which is far from being "experience defining," and that's the risk:
Ever heard someone say, "I bought The Witcher, but it's boring -- there's too much dialog!" or "I bought Diablo, but the story sucks!" or "Damn, why is the main campaign in Skyrim so lackluster?" Well, the reason for this is simple: the people who bought those games didn't realize they were buying a subgenre of RPG that focuses on an experience they don't like. They wanted awesome narration, deep character evolution, and pure action, or maybe more freedom.
And marketing doesn't help with that, as every RPG released nowadays is described as an action RPG.
The Elder Scrolls V: Skyrim
Of course, there is no doubt that this trend started because marketing needed a way to market "RPGs that are cool to play with a pad." The thing is, in the end, it simply roughly describes what kind of combat you might expect, but not the core experience of the game. And as the trend grows, we can safely expect that in a couple years (if that's not the case already) every RPG will be an action RPG, making the label basically useless.
In the end, it is understandable that marketing a game as an action RPG is sexier than as a "Narrative RPG" or "Sandbox RPG" -- but it's still confusing nonetheless. If you are a developer, don't simply describe your game as an "action RPG," and if you are a consumer, don't simply buy a game because it is called an action RPG; try to understand what the core experience in it is, and see if that's what you want.
The type of combat you have in an RPG does not define your core experience; combat is only a support for that core experience, which is either: story, sandbox, or character evolution.
So now you have your main experience nailed. You know what you are aiming for. Now what? Here is what I suggest:
When you're ready, use the breadcrumbs technique.