Defamation is a dirty trick against someone's reputation. If you were so furious at your friend that you spread a rumor that he was still wetting his bed, that would be defamation of your friend.
The noun defamation describes something very mean and completely deliberate, essentially a false accusation against someone or an attack on a person's good reputation. The terms libel and slander — written or spoken lies about a person, group, or business — both fall under the category of defamation. Sometimes defamation is even a punishable crime, and in every instance it's unkind and malicious.