Denial in psychology means that someone denies that something has happened or is happening although he really knows it is true. Usually this happens because admitting it would cause a lot of pain.
Denial is usually the first state of coping with loss. For example, if someone close to a person dies, the survivor's first feeling might be denial, or refusal to accept the fact that the person is really dead.
Denial, is also when you think that a team (like in football) will win a football match before its even started and refuse to accept the fact thet they could lose
Denial, is also when you refuse to accept the fact that someone else did something (like change something) when you 'think you know' it was a different person