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Diffraction refers to the phenomena of bending of a wave when it encounters an obstacle or a slit in its path. It can occur for sound waves as well as electromagnetic waves. Examples for obstacles can be an electron or a water droplet or anything which the wave cannot penetrate.

Diffraction is the process which causes interference, which is of utmost importance in engineering applications.

Diffraction is the slight bending of light as it passes around the edge of an object. The amount of bending depends on the relative size of the wavelength of light to the size of the opening. If the opening is much larger than the light's wavelength, the bending will be almost unnoticeable. However, if the two are closer in size or equal, the amount of bending is considerable, and easily seen with the naked eye.

Example:

The most colorful examples of diffraction are those involving light-  the closely spaced tracks on a CD or DVD act as a diffraction grating to form the familiar rainbow pattern we see when looking at a disk.