Defamation of character is a term that is often used to describe an accusation of slander or libel. Slander is a verbal statement that in some way demeans an individual or company in an unjust manner, whereas libel refers to a written derogatory statement.
A charge of defamation of character is difficult to prove in court because of the haziness of intention or "true-meaning." Although the term is quite evident and damaging, the ability to prove the true intentions of the individual charged with the act is notoriously arduous.
Any verbal or written attack that destroys or damages one's character is considered a defamation of character. This term is more relevant in regards to society or the interpretation as oppose to a legal system's interpretation.
The problems which revolve around proof in a legal setting are also coupled in with the protection of free speech guaranteed by the First Amendment. That being said, in most cases of defamation of character, a court will generally agree that an opinion or slanderous statement, no matter how damaging, in not a stated fact.