Truncation noise in digital circuits
It means if you multiply say two 16-bit numbers together, the result is 32 bits. Example: 65535x65535 = 4294836225.

If you must store the 32 bit result into 16 bits, you need to keep 16 bits and throw away 16 bits, therefore the result is truncated to 16 bits, so the value is not exact and there is error from the truncation.