LOD stands for Level of Details. This is an extremely useful functionality that allows you to optimize your game by switching highly detailed objects with those of a simpler geometry, based on their screen space.
LODs are toggled based on the percentage of game screen that is being occupied by the object, not just the camera distance, as is the case in many other programs.
In Unity, LOD is represented by an LOD Group component.
In order to make LODs work, you need to have the actual models—more precisely, multiple versions of the same model that scale down in polycount. Here are a few useful tips to follow when creating LOD models: