Diction is the language and vocabulary an author uses. In the case of The Color of Water, by James Mc Bride, there are two distinctly different voices which tell the story. That means there are also two distinct dictions used in the book.
Half of the chapters are written in the voice of Ruth, and her diction is indicative of who she is. Though she is white, she chose to assimilate herself and her family into the black community and her language reflects that. Even when she tells the story of growing up as a white Jewish girl, she speaks in the dialect of a grown Negro woman of her time--lots of contractions, colloquialisms, and informal language, such as "do right by."
The other half of the chapters are in the voice of Ruth's son, James. His mother worked hard (and craftily) to see that he had a proper education, and his diction is different from his mother's. He is more educated and speaks with less of a dialect. He uses effective figurative language and his voice is more formal; it stands in sharp contrast to some of the other characters with whom he interacts. (For example, the man who lives in his mother's family home describes the woman James's grandfather ran off with as “one of the sorriest, trashiest, poor-as-Job’s-turkey white women you ever did see.”)
In a book like this one in which the storytelling alternates, diction is one way for readers to clearly know which chapters are told from which point of view. Ruth's voice is quite different from James's voice.