An indentation is a notch, cut, or dent in something. If you take a hammer to a piece of metal, you will make a series of indentations.
The dent in indentation shares a root with your dentist, and an indentation is basically like a tooth mark. Except some "teeth" are larger than others — a meteorite leaves a huge indentation in the ground, just as a sharp pencil could make a tiny indentation in your finger. You can talk about conceptual indentation, too. Loving the novel Anna Karenina might make an indentation in your general aversion to reading. It’s that’s good.