Disease Damage
Disease is one of the types of damage in Diablo III. It is greenish/brown in appearance. Diseased targets suffer a damage debuff, dealing less damage and taking more from incoming attacks.
Disease damage is not well understood. It's thought to be dealt Witch Doctor skills such as Haunt and Grasp of the Dead but that's not been confirmed. It may also be added to skills via runestones or item modifiers.
Some monsters surely possess Disease damage, but none are yet confirmed. It' snot known if any boss modifiers impart it.
Disease damage can be resisted with Poison resistance. It's not known if it can be reduced or absorbed, and it can not be blocked.
Critical hits scored with Disease damage impart an unknown bonus.
Diablo III Damage Types
Blizzard's @Diablo Twitter feed added some clarification about damage types in posts made in early December 2010.[1]
any change in the range of damage types to include holy, shadow, voodoo or anything else to match the classes? —Scyberdragon
Damage types will likely change some but are currently Physical, Fire, Lightning, Cold, Poison, Disease, Arcane, and Holy. —Diablo
Fairly significant in their difference, but both countered with a single resistance. Damage/resists aren’t design complete though.—Diablo
Whats the difference between poison and disease damage?—WickedBubba
Disease has a damage debuff (both intake and output), and poison has a health debuff (regen/heal). Subject to change of course.—Diablo
Is there much difference between poison and disease? They’re both internal maladies that hurt over a period of time.—Grug