Diversification generally means making something more varied or diverse.
For example, a business, school, or organization may seek to diversify their population by recruiting individuals from a variety of ethnicities, genders, sociopolitical backgrounds, or socioeconomic statuses. Another form of diversification is the act of spreading out one's resources - much like a business will have a primary product but will also sell other products and have investments in other businesses.
In finance, it is often advised to "diversify your assets" and diversification is investing or allocating finances in a way so that investments are spread out over varied resources. This lessens risk in that if one investment fails others will make up for it.