A diction error is an error in word choice. There are two ways you can go wrong when choosing a word. You can choose a word that doesn't mean what you think it means. Or you can choose a word or phrase that is innappropriate to the rest of the composition. Usually such words and phrases are either colloquial or nonstandard.
I. Confused Words
Any grammar or usage book will have long list of common word choice errors. What follows gives you an idea of the sorts of errors we make.
Homonym errors: The two most common homonym errors are the it's/it confusion and the their/they're/there confusion. If you take a moment to check the context when you use any of those words, you will avoid the words that account for ninety percent of homonym errors. Ther are, however, other pairs of words that cause confusion: allusion/illusion -- An allusion is a reference to some other work. An illusion in an unreal image.
Ignorance errors: anxious/eager -- To be anxious is to be fearful. To be eager is to be desirous.
"Despite its frequent misuse it's still wrong" errors: regardless/irregardless -- Irregardless is not a word. Regardless means without regard or in spite of. If irregardless were a word, it would mean without without regard.
Similar form errors: already/all ready -- Already means by this or a specific time as in, "The cats were already fed." It is nonstandard when used as an intensive: "Enough already!" All ready asks if all of something is prepared as in, "Are the passengers all ready?"
II. Inappropriate Word Choice
Once again, what follows is merely a sample of the sorts of errors we writers often make. Refer to a grammar or usage text for a fuller list.
different than/different from -- Though the first is common, the second is the standard form. The word than is a conjunction that should be reserved to introduce a comparative clause: Joe is taller than Fred is. From is a preposition that demands a noun as its object. That makes it appropriate in this context: An apple is different from a pear.
a lot (or alot)/lots of -- a lot means a number of associated people or things as in: He faced an anxious lot of students. However, in everyday use lot has come to mean very or many. In standard writing avoid this colloquial use: Fred liked Margie a lot should be Fred liked Margie very much. Lots of people eat cereal should be Many people eat cereal.
when/where -- Avoid using these words in definitions. They make for awkward and grammatically illogical sentences: A foul is when someone breaks a rule should be A foul is an infraction of the rules. The error was where John followed your advice should be The error was John's following your advice.
reason is because -- Since both reason and because speak to cause, their use in this construction is redundant: The reason is because I like you should be The reason is that I like you.