In its simplest form, dictation refers to a person reading some text aloud so that the listener(s) can write down what is being said. When used in the language classroom, the aim has traditionally been for students to write down what is said by the teacher, word for word, later checking their own text against the original and correcting the errors made. While this certainly has its uses, there are countless variations that can make it more interesting and learner-centred.
For example, a related activity, sometimes called 'dictogloss', requires the students to only take notes of the key words used as they listen and then later reconstruct the text so that it has the same meaning as the original text although perhaps not exactly the same form.
There is also emphasis on accuracy, but expectations here can be increased or decreased depending on the level of the class - the main aim is that the students understand and then re-convey the meaning of the passage, concentrating on the communicative aspect of the activity rather than producing a grammatically perfect text.