It means the train will not pass by the regular route to reach its end station.
The train gets diverted due to many unexpected issues, like a signal failure, an accident in route, coaches still on the railway track, unscheduled maintenance of the track, a strike, a hurricane, bad weather, etc.
If a train has been diverted and a passenger doesn't want to undertake the journey, he can cancel his ticket or file a TDR within 72 hours of the scheduled departure of the train at the boarding station.
If you find out that the train gets diverted and you decide not to travel or that it is diverted during the journey and the Indian Railway doesn't make any alternative arrangements, then you can claim a full refund either at the reservation counter or by filing an online TDR.
But if you undertake the journey and are willing to use an alternative travel facility provided by the Indian Railway, then you get a refund of the untraveled portion after retaining the fare for the traveled portion at the station where the journey is terminated.