Optimization is a very broad term. In general it implies modifying the system to make some of its aspect to work more efficiently or use fewer resources or be more robust. For example, a computer program may be optimized so that it will execute faster or use less memory or disk storage or be more responsive in terms of UI.
Although "optimization" has the same root as "optimal", the process of optimization does not produce a totally optimal system: there's always a trade-off, so only attributes of greatest interest are optimized.
And remember:
The First Rule of Program Optimization: Don't do it. The Second Rule of Program Optimization (for experts only!): Don't do it yet. (Michael A. Jackson)