When things fade, they gradually become less clear or more faint. When you wake up after having a strange dream, its details quickly begin to fade unless you write them down right away.
Dreams usually fade once you wake up, and sunlight begins to fade toward the end of the day. Sounds can fade too, as when the music you can hear from a passing car begins to fade as it moves down the road. Disappointments in life can make your hopes and dreams fade, and the smell of cut flowers will eventually fade as well. The Old French root word, fader, means "weaken, wilt, or wither."