The Collaborative International Dictionary of English v.0.48:

Severance \Sev"er*ance\, n.
   1. The act of severing, or the state of being severed;
      partition; separation. --Milman.
      [1913 Webster]

   2. (Law) The act of dividing; the singling or severing of two
      or more that join, or are joined, in one writ; the putting
      in several or separate pleas or answers by two or more
      disjointly; the destruction of the unity of interest in a
      joint estate. --Bouvier.
      [1913 Webster]

WordNet (r) 3.0 (2006):

severance
    n 1: a personal or social separation (as between opposing
         factions); "they hoped to avoid a break in relations" [syn:
         rupture, breach, break, severance, rift, falling
         out]
    2: the act of severing [syn: severance, severing]