Why not just Google it! Like I did:
Granularity is usually mentioned in the context of dimensional data structures (i.e., facts and dimensions) and refers to the level of detail in a given fact table. The more detail there is in the fact table, the higher its granularity and vice versa. Another way to look at it is that the higher the granularity of a fact table, the more rows it will have.
Let me illustrate with the following example: Say we have a data mart with a single fact (Sales) and three dimensions (Time, Organization and Product). The fact table contains three metrics (Unit Price, Units Sold and Total Sale Amount). The Time dimension consists of four hierarchical elements (Year, Quarter, Month and Day). The Organization dimension consists of three hierarchical elements (Region, District and Store). The Product dimension consists of two hierarchical elements (Product Family and SKU).
As always, the metrics in the Sales fact table must be stored at some intersection of the dimensions (i.e., Time, Organization and Product). Hence, in this data mart, the highest granularity that we can store Sales metrics is by Day/Store/SKU (i.e., the lowest level in each dimensional hierarchy). Conversely, the lowest granularity that we can aggregate Sales metrics to in this data mart is by Year/Region/Product Family (i.e., the highest level in each dimensional hierarchy). We may also (for a variety of performance reasons) choose to store Sales metrics at some intermediate level of granularity (e.g., by Month/District/SKU).
