Poetic diction is a term used to talk about literary /linguistic style, vocabulary, metaphors and other elements used in writing poetry; and a 'system' for such writings and critical philosophy dictating it, was the 'poetics' of it.
These ideas and distinctions remained in place from ancient Greek and Roman times , starting with Plato and Aristotle, down to the late 18th and early 19th centuries, when with the advent of Romantic literature/Romanticism in English literature, William Wordsworth and his friend and poetic collaborator ST Coleridge challenged these assumptions. Earlier critics and writers had made a distinction of diction between poetry and prose, but in the famous 'Preface' to the Literary Ballads (1800) Wordsworth proposed that a 'language near to the language of men' was as good for poetry as for prose. In this respect, at least , Wordsworth differed from Aristotle.
However, in another way at least, he also adhered to some of the old rules and ideas laid down by Aristotle in his ''Poetics''. He had talked about 'mimesis' or imitation, an act whereby the poet creates an image or representation in his mind etc, which will then, in turn, have significant influence/impact on other artists, who follow, and who can then draw upon this 'imitation' for subsequent 'imitations' and so on. Aristotle also stressed that such work or representation should be from a common, popular pool of experience relating and counting upon things, occurences etc, that common people could relate to. And Wordsworth, in this, agreed, as he also says that ''a poem was to chuse [sic] incidents and situations from common life''.