Diffuse Illumination:
Diffuse illumination means light that comes from all directions not from one particular source. Think about the light of a grey cloudy day as compared to a bright sunny one : On a cloudy day, there are no shadows cast, the light from the sun is scattered by the clouds and seems to come equally from all directions.
Figure: Diffuse Illumination
Some proportion of the light reaching our surface is reflected back to the observer. That proportion is dependent simply on the properties (colour) of the surface and has no dependence on the angle of the viewer (that is why diffuses). If the strength of the incident illumination is Id and the observed intensity is Ed then the two are related by the simple formula
Ed = R . Id ------------- (1)
where, R is the reflection coefficient of the surface (0 ≤ R ≤ 1), which is a proportion of the light that is reflected back out.