Abstraction
Also said as Simplification, Level of detail
Leaving out the parts of a real thing that do not matter to your game, and keeping the ones that do. A chess knight is a whole cavalry charge reduced to one L-shaped move.
You cannot simulate everything, and the player cannot care about everything. What you leave out decides what the game is about and how much it asks of the player.
Say it
“Do not simulate each soldier. Treat each squad as one unit with one health number. Battles should resolve in seconds, and the choice is which squad to send, not how each one aims.”
Where you’ve seen it
Football Manager can show a whole match as coloured dots on a pitch. It leaves out almost everything you would see at a stadium, and keeps what you are there to judge.
Not to be confused with realism
Realism is how closely the game resembles the world. Abstraction is a choice about what to keep, and a very abstract game can still get the important part right.