When soil or land erodes, it wears away or is removed. Many beaches seem to get smaller and smaller, as the endless wash of the waves begins to erode the fine sand.
While erode is most commonly used when describing land loss, you can also use it in less literal ways. Numerous hospital bills can cause your savings to erode. Each time you catch your friend in a lie, your trust in her erodes a little more. Consumer confidence is eroding away as the media reports more and more bad economic news. What’s key here is both the sense of loss, as well as the idea that it is a gradual process.