Diction is a fancy term for word choice and phraseology.
It’s an important element of writing, because your diction affects the tone and flow of your writing. If you want to see what I mean, take a chapter from The Lord of the Rings and compare it to a chapter from Game of Thrones.
Your diction should be a matter of conscious choice, because it affects how your audience judges your work (I’m thinking of adjectives like pretentious, arrogant, genuine, melodramatic, honest, etc.)
Unless I have some specific purpose that requires a different mode of diction, I try and stick to everyday language, avoid clichés, and be careful with phrases that offend for no good reason (for example, I never say “you throw like a girl” unless I put it into the mouth of an adolescent boy or a sexist adult).
That’s because every piece of writing I produce is an appeal to someone. For the most part, I want my writing to come across as an attempt at conversation. I want it to give the (honest) impression that I’m real; that I don’t stand on formality; and that I respect everyone, both as human beings and as individuals with their own perspectives.
I try not to talk like a theorist unless I’m talking to theorists, and I try not to use formal diction unless I’m writing a formal paper. Here’s an early attempt of mine to blog about theoretical social media stuff without sounding like a theorist. I don’t think I succeeded. This one, which I wrote to share how I learned to use Twitter with people who are starting from scratch like I did, is much more readable.