By referring to "diction" we simply mean word choice. Of course, every text is shaped incredibly by the choice of each individual word as chosen by the author, and this vignette from this incredible novel is certainly no exception. What is of note is how the diction conveys the impression of the young, first person narrator, who sees everything from her own eyes and describes it by conveying her way of looking at the world. Consider how the narrator describes the different types of hair in her family. She uses a number of similes to convey the differences in texture, appearance and colour which uniquely convey her child's view point:
Everybody in our family has different hair. My Papa's hair is like a brook, all up in the air. And me, my hair is lazy. It never obeys barrettes or bands. Carlos' hair is thick and straight. He doesn't need to comb it. Nenny's hair is slippery--slides out of your hand. And Kiki, who is the youngest, has hair like fur.
The comparisons that are selected are not elaborate, but common, every-day objects are used that a child would be familiar with. This continues as the narrator describes the smell of her mother's hair, and how she remembers it smelling like "bread before you bake it" as she sleeps in the same bed as her parents.
Thus the diction helps develop the picture we have of the narrator as we continue to see her life in this barrio in the States through the narrator's own eyes.