The Collaborative International Dictionary of English v.0.48:

Collimation \Col`li*ma"tion\, n. [Cf. F. collimation, fr. a
   false reading (collimare) for L. collineare to direct in a
   straight line; col- + linea line. Cf. Collineation.]
   The act of collimating; the adjustment of the line of the
   sights, as the axial line of the telescope of an instrument,
   into its proper position relative to the other parts of the
   instrument.
   [1913 Webster]

   Error of collimation, the deviation of the line collimation
      of an astronomical instrument from the position it ought
      to have with respect to the axis of motion of the
      instrument.

   Line of collimation, the axial line of the telescope of an
      astronomical or geodetic instrument, or the line which
      passes through the optical center of the object glass and
      the intersection of the cross wires at its focus.
      [1913 Webster]

WordNet (r) 3.0 (2006):

collimation
    n 1: the accurate adjustment of the line of sight of a telescope