A performance-enhancing technique that involves an object in the game world having a varying amount of detail depending on how relevant it is to the current scene.

Static model LODs, for example, consist be several versions of a model that are rendered depending on how large or small it is on screen, with the smaller version having less detail (triangles) and therefore rendering faster.

Additionally, some engines support continuous level of detail instead of discrete mesh changes.

LOD techniques can be applied to textures (mipmapping), shaders, AI, etc.

See also http://en.wikipedia.org/wiki/Level_of_detail