What is the process of connecting two molecules under removal of one molecule of water?
Since it is a removal of water, it cannot be hydration which is defined as the addition of water.

Similarly, hydrolysis includes the addition of water to something so that it degrades in some way.

Neutralisation does indeed generate water, but not always one molecule per reaction equivalent (can be two or three) and you do not connect molecules but ions.

Condensation not only has its physical definition you stated but it also means (in a chemical sense) connecting two molecules under formal exclusion of one molecule of water.

Note that in many to most processes, the water exclusion is entirely formal and what actually is excluded is something like $\ce{H2PO4-}$.