Habituation is a form of associative learning involving smaller and smaller responses due to a continued stimulus.
At first, an animal will respond to sensory stimulus, but if the stimulus neither rewards nor harms the animal, it will learn to suppress its response through repeated encounters with the stimulus.
In other words, every time an animal experiences something that doesn't hurt or help it, it cares less.
In the animal behavior unit of many laboratory biology courses, a simple experiment will be performed. Each student or group of students will receive a couple of live snails and a teasing needle. Then they will poke the snails with the teasing needle. At first, the snails will quickly retreat into their shells, but with repeated poking, they retreat more and more slowly. Finally, after approximately ten pokes they cease to notice the jabs at all. The snails have become habituated to the stimulus of the teasing needle.
A more interesting experiment was conducted by yours truly after, ahem, finding one of those nifty orange strobes that they put on saw horses to signal traffic.
When I returned home after the night's adventures, I found my sister sleeping peacefully on the couch. Curious as to how sensitive she would be while in the arms of Morpheus, I held the strobe over her face. A few flashes later, she looked the other way. Upon repetition, the same effect was observed. After five or six full responses to the stimuli, she stopped caring. In fact, there was no response even after long periods of strobing. She had become completely habituated to the stimulus of the light. I also got a free 6V lantern battery and an orange strobe light.
It should be noted that habituation to a stimulus affects that stimulus and that stimulus alone, and does not cause any sort of general decrease in responsiveness.