Dilution of precision (DOP) is a GPS term used in Geomatics Engineering to describe the geometric strength of satellite configuration. When visible satellites are close together in the sky the geometry is said to be weak and the DOP value is high, when far apart the geometry is strong and the DOP value is low.
Note that this situation is not just restricted to GPS, but occurs in electronic-counter-counter-measures (electronic warfare) when computing the location of an enemy emitter (radar jammers and radio communications devices). Using interferometry techniques like this can give certain geometric layout where there are degrees of freedom which cannot be accounted for due to inadequte configurations.
Another alternate interpretation of the word Dilution of precision can be found in Computer_graphics_dilution_of_precision.