tl;dr: A process takes time $\Delta t_B$ in some frame of reference B.
Is the time an actual observer $A$ would see $\Delta t_A = \Delta t_B / \gamma$?
Or is the time that the light travels to the observer not included in $\Delta t_A$?
A little thought experiment to make my question clear:
There are two people Alice and Bob. The two reference frames are denoted with $A$ and $B$ as indices.
Alice is on the earths surface (or in orbit) the entire time.
Bob is in a spaceship travelling near the speed of light towards earth.
Suppose Alice had a telescope on earth, that is precise enough to see exactly what is going on in Bobs spaceship.
At time $t_0$ Bob passes a planet that is $d_A = 10 ly$ (lightyears) away from earth.
Alice sees this event happening at time $t_{1,A} = t_{0,A} + 10 y$ (years), because the light takes 10 years to travel to her.
Bob flies at such a speed that it takes $\Delta t_A = 11y$ until he reaches earth.
Then Bob would pass earth at $t_{2,A} = t_{0,A} + \Delta t_A = t_{1,A} + 1y$ and Alice would see the entire journey of Bob in $\Delta t'_A = 1y$.
What is the difference between $\Delta t_A$ and $\Delta t'_A$?
Which $\Delta t$ is to be used to calculate the time the journey takes for Bob?
Would Alice see Bobs time run slower or faster than her own? (suppose there is a clock on board)
In an opposite scenario where Bob travels from the earth to the planet, would Alice see Bobs time run slower or faster?
I think time dilation would say time always runs slower in a moving frame of reference, but including the time that light travels to the observer would suggest a dependence on direction.