Final answer:
The term for the smallest difference in stimulation that an observer can reliably detect is the 'difference threshold' or just noticeable difference (jnd), not to be confused with the absolute threshold which pertains to the detection of the stimulus itself.
Step-by-step explanation:
The term that refers to the smallest difference in stimulation that can be reliably detected by an observer is known as the difference threshold or the just noticeable difference (jnd). This concept explains how much a stimulus needs to change for us to notice that a change has occurred. Ernst Weber proposed the theory, which became known as Weber's law, stating that the difference threshold is a constant fraction of the original stimulus. The absolute threshold, on the other hand, refers to the minimum amount of stimulus energy required to be detected about 50% of the time and does not pertain to the detection of differences between stimuli.