Diegesis, from the ancient Greek (“recounted story”) describes narrative, in contrast with mimesis which deals with symbolism. Diegesis tells; mimesis shows. The term is also used to distinguish sounds in film and games. Diegetic sound is one that originated from within the film or game world - an 'actual' sound. It has a source visible on the screen or implied to be present by the action of the film or game. Diegetic sounds are those sounds in a game that the characters could hear, like gunshots, nearby animals or a radio.
Non-diegetic sounds by contrast are those that the story or in-game characters would typically not hear. These are most typically the musical score, as well as music to set the mood or provide feedback about game states or narration. Non-diegetic sound comes from a source outside story space.