Diction is actually how clearly you pronounce your words and how easily understandable the words are.
For example, kids in choir would practice singing sayings like, "Mama made me mash my M&Ms. Papa papa picked a pack of peas." It's so that they don't stumble over words and you can clearly hear what they are saying.
Some rappers have no diction.
When you hear a song and you think: "Did they say you or chew..." that's because their diction isn't well advanced.
However, it terms of writing it refers to a writers choice of words and own voice.
Writer One may say: The cat jumped over the bridge.
Writer Two may say: The large black cat leaped over the large highway bridge.
Writer Two has a more precise diction than Writer One.