What Does Level of Detail (LOD) Mean?
Level of detail is a general design term for video game landscapes in which closer objects are rendered with more polygons than objects that are farther away. Generally speaking, the level of detail is dictated by the game's system requirements. Given the power of modern processors, very little degradation in the level of detail is noticeable anymore.
Techopedia Explains Level of Detail (LOD)
Early video games had very noticeable changes in the level of detail, with objects in the background visibly gaining definition (and polygons) as they entered the foreground. This was a simple shortcut to save processing power for other tasks while still presenting a passable background to the player. Modern video games still use the same procedure, but the base level from which they render has a much higher polygon count, meaning few people can spot the difference between foreground and background with the naked eye.