What does gas diffuser in welding mean?

If you are referring to TIG - GTAW it replaces the standard ceramic cup with a cup that contains 6 or so screens that align the gas stream so that it travels farther out before dissipating. Without out the screens the gas stream will travel just so far before tumbling and will not cover the puddle adequately. Having a diffuser allows one to extend the Tungsten further out. This enables you to reach places the standard cup won't.