Refer to the edited figure.
Triangles ABC and A'B'C' are similar because of AAA.
Also,

Therefore
ΔA'B'C' is 1/3 the size of ΔABC.
This means that the scale factor from ΔABC to ΔA'B'C' is a 3-factor reduction.
Answer: reduction; one-third.
The dilation is a reduction.
The scale factor of the dilation is one-third.