The Collaborative International Dictionary of English v.0.48:

Collocation \Col`lo*ca"tion\, n. [L. collocatio.]
   1. The act of placing; the state of being placed with
      something else; disposition in place; arrangement.
      [1913 Webster]

            The choice and collocation of words.  --Sir W.
                                                  Jones.
      [1913 Webster]

   2. (Linguistics) a combination of related words within a
      sentence that occurs more frequently than would be
      predicted in a random arrangement of words; a combination
      of words that occurs with sufficient frequency to be
      recongizable as a common combination, especially a pair of
      words that occur adjacent to each other. Also called
      stable collocation. Combinations of words having
      intervening words between them, such as verb and object
      pairs, may also be collocations.
      [PJC]