If you have the ability to say the right thing when two friends are fighting, making both sides happy, you are diplomatic. You have tact. You are a peacemaker.
You can be diplomatic in your personal life if you’re polite, easy to get along with, and able to deliver bad news in a kind way. You can also be professionally diplomatic — diplomats are important members of the U.S. State Department. Diplomats keep the peace and maintain good relationships with other countries, even as they try to get other countries to see and do things our way. That's why keeping the peace in smaller ways is also called diplomatic.