A Diablo clone is generally a PC or console game that has taken most or all of it's gameplay and other inspiration from the Diablo games series.
Sometimes players will associate any Action RPG with the term "Diablo clone", but generally, it means games that play almost identical to Diablo I, Diablo II and Diablo III.
Some examples of games that have been considered Diablo clones include Loki, Mythos and Torchlight among others. This is by no means a comprehensible list. If you know of a lot more Diablo clones, feel free to add here as a list.