Definition: A loss of coherence between the angles of components in a superposition and a loss of information due to environment, which gives the appearance of a wave function collapse.
More about the term: A wave function collapse occurs when the outcome of a quantum state is determined by an observer. An observer can be a concious observer or even the interaction of particles. Instead of a determinate state, decoherence is akin to pulling one string out from an entire knot of strings. Decoherence is a major talking point and factor in multiverse scenarios.
In 1956 Hugh Everett III published his Ph.D. dissertation titled “The Theory of the Universal Wave Function.” In this paper Everett argued for the relative state formulation of quantum theory and a quantum philosophy, which denied wave collapse. Initially, this interpretation was highly criticized by the physics community and when Everett visited Niels Bohr in Copenhagen in 1959 Bohr was unimpressed with Everett’s most recent development.
In 1957 Everett coined his theory as the Many Worlds Interpretation of quantum mechanics. In an attempt to circumvent the problem of defining the mechanism for the state of collapse Everett suggested that all orthogonal relative states are equally valid ontologically. What this means is that all-possible states are true and exist simultaneously. Decoherence is what prevents us from experiencing more than one macroscopic reality.
 Jonathan Allday, Quantum Reality: Theory and Philosophy (Boca Raton, FL: Taylor & Francis, 2009), 439.