I would also indeed call this "the zone", a concept of concentration that even I don't fully understand at this point (for Touhou at least). But regarding the "time slowing down" part, I'm willing to credit this to adrenaline (naturally produced, of course) or something similar, where such improvements in reaction time are meant as biological "survival" traits. I imagine that's not the whole story, but I'm not enough of an expert on the subject to say much else.