It means that the air movement in your lungs is decreased. Pneumonia reduces lung function, diminished means that the doctor cannot hear air moving through your lungs because of an infection. Think of it as having only part of lung thats working. You can still breathe but not as well as before the infection. The doc hopefully gave you antibiotics for the infection. Make sure that you take all of them even after you start to feel better, to be sure that the infection goes away. If you stop the medication you may feel great for a while but get even sicker later. Then you have to start on stronger medication.