Diegesis is a recounting of events in the words of a narrator.
Like mimesis, diegesis is a term explicated in the works of Plato (Ion, The Republic) and Aristotle (Poetics). The opposite of mimesis, it refers to the information related by the narrator and many times is comprised of characters thoughts and actions. This excludes dialogue, which is categorized under mimesis. In addition, diegesis can be characterized as the narrator's commentary on the thoughts and actions of characters.
"A twisted piece of paper lay half burned upon the hearthrug; he picked it up, and unfolded it, in order to get a better pipe-light by folding it the other way of the paper. As he did so, absently glandcing at the pencilled writing upon the fragment of thin paper, a portion of a name caught his eye--a portion of the name that was most in his thoughts. He took the scrap of paper to the window, and examined it by the declining light."
-Mary Elizabeth Braddon, Lady Audley's Secret
The following are some varied ways in which "diegesis" is defined in the field of narratology:
"Diegesis summarizes events and conversations. In such a summary the voice of the narrator will always come through. He colors narrated events, which are therefore no longer directly available" (Herman and Vervaeck 14). -Luc Herman and Bart Vervaeck, Handbook of Narrative Analysis'
"Narrator describes what happened in his/her own words (or recounts what characters think and feel, without quotation)" (Martin 124). Wallace Martin, Recent Theories of Narrative
Prince, Gerald. Dictionary of Narratology.