Diffusors (or diffusers) are used to treat sound aberrations, such as echoes, in rooms. They are an excellent alternative or complement to sound absorption because they do not remove sound energy, but can be used to effectively reduce distinct echoes and reflections while still leaving a live sounding space. Compared to a reflective surface, which will cause most of the energy to be reflected off at an angle equal to the angle of incidence, a diffusor will cause the sound energy to be radiated in many directions, hence leading to a more diffusive acoustic space.
It is also important that a diffusor spreads reflections in time as well as spatially. Diffusors can aid sound diffusion, but this is not why they are used in many cases; they are more often used to remove coloration and echoes.
Diffusion is the last piece of the puzzle. Unlike absorption, which removes energy from the sound, therefore removing it from the room, diffusion doesn't remove the energy, it's reflected back into the room. But unlike the exposed hard surfaces that reflect the sound energy straight back into the room, diffusion will instead disperse that energy in a splayed pattern. This way the sound comes back into the room without losing energy, but splayed enough that it doesn't bounce back and forth between two parallel surfaces.