What is a dilation?
Most people think of the eye when they hear the word dilate.
The pupil of the eye dilates (expands or shrinks) depending on the amount of light striking the eye.
Dilation in mathematics also deals with expanding and shrinking of shapes. A dilation is just a transformation where the same shape/image is produced but the size changes depending on the ratio used to dilate the image. The ratio/proportion determines the size of the new image (if less than one, then the new image is smaller; if greater than one, then the new image is larger), and the center of dilation that you choose to use determines the position of the dilated images.
If you start with a small image and dilate to get a larger image, then you have an enlargement. Going the other way, the smaller image would be a reduction of the larger image, if you started with the larger image. These reductions and enlargements are just transformations that we call dilations.