I haven't played Minecraft in well over a year but from what I can remember, they brought out some battle mode thingy which can have up to 8 players per battle.Never had the issue you had, you probably were connecting to someone far away or your host is bad. I never have had an issue with lag.
However I remember it was awful as it was so damn laggy that it was basically unplayable. If you have played on a friends map with a maximum of 3 players, it lags extremely badly, mobs can hit you from like 10 blocks away and if you were to mine stuff, the drops wouldn't show up half the time.
So try taking 8 players and have them fight each other is so incredibly laggy.
On another note 1.12 is on its way and looks good for builders wool is more vibrant and there are 2 new block types which all use the color pallet that the wool does.
Also as said in a tweet from dinnerbone they only have 4 more block ID's left but they have been working on a solution.