Centralization means bringing things to one central place or under unified control. The centralization of a school district might mean the superintendent makes important decisions for all the schools, rather than leaving those choices to individual principals.
Centralization can refer to the consolidation of operations, like the centralization of a company's distribution, so that all the products they make are shipped out from one central warehouse. However, it often refers to the consolidation of power or control. When centralization occurs in a government, it means a small group increasingly controls everything; the disadvantage to extreme centralization is that there aren't enough checks and balances to that power.