That part of overall efficiency which consists of getting the maximum output technically possible from any given inputs, or producing given output with the fewest possible inputs. X-efficiency thus implies the complete absence of slack in production. Evidence for X-efficiency can take two forms. One is theoretical, showing that in principle better results are not obtainable. The other is empirical, showing that no other firm or organization is observed to do better.
Reference: Oxford Press Dictonary of Economics, 5th edt.