LOD stands for level of detail, and it’s the process of making less detailed versions of your models that are viewed when they’re further away from the camera.
This lowers the strain on the computer allowing it to render more objects while maintaining a high frame rate.
There are generally 2 parts of the model that get optimized for LOD. These are the geometry (polygon count) and the texture resolution (lower resolution textures = smaller file size).
LODs are usually numbered within the real time engine that you use. LOD0 is the full detail model that is viewed closest to the camera. From there LOD1 is a lower detail version, followed by LOD2, etc. source