Traditional martial arts are ones where they place a emphasis on ritual and tradition. We do things this way because that's the way we've always done them, the old masters created something perfect and we must try and emulate them. Non traditional care more about doing things that just work. Styles adapt, and a dedicated student should be perfectly capable of eventually exceeding his teacher (who exceeded his teacher, etc.)
Of course it's a sliding scale, with some styles being more traditional than others, and schools within a style also varying in their level of tradition.