Displacement thickness is a measure of the reduction in the effective flow area due to the presence of the boundary layer. It represents the distance by which the outer inviscid flow is shifted because of the boundary layer, which accounts for the velocity deficit within the boundary layer. The displacement thickness is defined as the integral of \( 1 - \frac{u}{U} \), where \( u \) is the velocity at a given point and \( U \) is the free-stream velocity.