I've noticed that the word "diegesis" is an important term when discussing literature and literary value. Where does it come from, and what does it mean?
The word "diegesis" is Greek in origin, and comes from the old Greek διήγησις, meaning "to narrate." In a sentence, it means the narrative or plot of a text, as told through a narrator. (This is in contrast with mimesis, which occurs when the viewer is shown the story.) From that paper:
...the term diegesis [has a] schoolbook definition as a simple and unembellished narrative of events, preferably in chronological sequence, with a claim—whether substantiated or not—to inherent plausibility.
There's a little subtlety in this definition. Diegesis refers specifically to the narrative elements of the story as they should be viewed from within the story through the narrator. That narrator can be any narrator of the current text: omnipotent, outside the world, inside the world, first person, third person - if the story is narrated, it's diegetic. This is a worthwhile essay on where people have drawn the line.
Since diegesis concerns the division between shown and told elements of a story, it's particularly useful when talking about movies. The straightforward example is that a movie's dialog is diegetic, but a movie's musical score is not diegetic. Even though both are textual, and hold influence over the audience, only one of the two holds influence over the characters. In movies, the result is that there are diegetic and non-diegetic sounds: something like a bowl crashing into the ground is the former, while something like an opening score is the latter.
However, it's also useful in written texts. This becomes important when talking largely about external versus internal presentation, particularly in experimental literature. Here are a few examples of where and why this matters in literature:
The book The Unfortunates comes in a wooden/cardboard box, with quotes printed on various sides. The chapters of the book are provided in unbound leaflets; you, the reader, quite literally mix the chapters together in random order. The diegesis of this story is, therefore, everything that you read, in the order that you read it. (This has the odd effect of making the story very personal to you. )
However, the fact that the chapters are shuffled, or the particular order in which they appear, or the fact that the book comes in a box, or where on the box the quotes are printed, are not diegetic elements. It's only the actual order the text ends up in that matters, as this is what the narrator of the story conveys to you.
In the book House of Leaves, Danielewski plays around with page formatting quite a lot (not really spoilers):
The idea of "diegesis" is actually quite pertinent to understanding this book. In the first example, that letter is printed exactly as it would have appeared to the character who read it. The fact that the character - that narrator - is including it in that form, makes it diegetic.
In the second example, however, it is arguable (without getting into the nuance of the book) that it appears only as you, the reader, would see it. This would make the element non-diegetic - it's conveying something about the story that is shown, not told, and has no narrator associated with it.
Covers of books aren't usually diegetic elements, but in many cases, they can matter to how a book should be interpreted.
Illuminated manuscripts are filled with non-diegetic elements - things that the characters or text of the book would have no ability to describe, but which are written in the book anyway.
The entire physical design, especially font and font sized used, the way the book is typeset, etc. are all elements contributing to the way a story is perceived by the reader. These non-diegetic elements can say a lot about the text itself, because the way a text is presented is often important to our understanding it.
It's a point that's deceptively complicated, and has had significant impacts primarily in visual media. However, its roots are in literature, with Aristotle, which makes it broadly applicable to experimental literature.