Time does run slower in orbit do to relativistic effects (time dilation). And it must be taken into account when using GPS or they’d be worthless. And it’s an entirely separate matter from the lag in time it takes signals to get from satellites to receivers, which must also be taken into account
http://www.astronomy.ohio-state.edu/~pogge/Ast162/Unit5/gps.html
The lag time is central to the operation of GPS. Time is distance. The distance puts you on a sphere centered at the satellite's location. Make 3 such measurements and you can get a single intersection of the 3 spheres, which tells you where you are. However, in order to measure those distances, you must measure that time very accurately, and that takes a 4th satellite. More is better, because none of the measurements is perfect, and because of something called "Geometric dilution of precision", which deals with "Good" and "bad" geometries of the satellites used to obtain the solution. In general, it tends to affect the measurement of altitude, but it can also affect position on the map.