Diorama can refer to either of two things: a mobile theatre device, or a three-dimensional life-size or miniature model usually encased in a glass container for a museum. They are achieved in different ways, but are really the same thing: a reconstruction of a scene or place.
As a Theater Device
The diorama as a theatre device and source of entertainment reached its peak during the 19th century. It is chiefly due to the innovations of Louis Jacques Mande Daguerre (1787 to 1851), best known as the co-inventor of the daguerreotype, the first common method of photography. Daguerre constructed an arched theatre space in which enormous paintings were rendered on transparent linen. These linen panels were lit with combinations of light from the front and behind them, which made audiences think that they were looking at a natural scene.
Originating in Paris in 1822, Daguerre's diorama was such a success that he was compelled to open a second one in London in 1823. The paintings were usually depictions of events or scenes local to where the diorama was displayed. Between 1822 and 1839, Daguerre made more than 20 dioramas.
As a Life-Size Model
Full-size dioramas are mostly popular in museums, where three-dimensional landscapes of historical events, natural scenes or cityscapes are displayed to educate as well as to entertain. Frank Michler Chapman (1864 to 1945), a curator at the American Museum of Natural History in Manhattan, New York, is credited for popularising the full-size models seen in museums today.
As a Miniature Model
The miniature model might be the oldest form of the diorama. As early as the sixth century, the Japanese were practicing the art of miniature landscapes called bonkei. Bonsai, another artform, is similar and appeared around the same period, although rather than mimic landscapes on a small scale, it involves growing miniature trees in pots to make them look like their life-size counterparts. Bonsai may have antecedents in ancient Egypt as far back as 4000 B.C., where pictoral records from that period reveal trees in containers.
In the 19th and 20th centuries, it became common for seamen to build dioramas of sailing ships. Today, the most popular of small dioramas---be they built by servicemen or hobbyists---represent scenes from historical events.
The diorama is meant to be three-dimensional. Also, the diorama is not meant to be just a pretty, appealing scene; it is supposed to tell a story or serve a purpose for its creation.
Dioramas can depict the gravestones of a cemetery, the scene of war carnage, an airport teeming with planes, a rainforest or a desert, a living room---anything. Creating dioramas holds limitless possibilities.