The word is a direct borrowing from Roman civil administration. When the emperor Diocletian reorganized the empire's provinces at the end of the third century, he grouped them into larger units called dioceses, each overseen by an official called a vicar and standing between the province and the praetorian prefecture.
When Christianity gained legal standing under Constantine in the following decades, bishops already governed cities that sat inside this civil framework, and the church's own jurisdictions came to track the empire's boundaries so closely that the word transferred directly, though narrowed: a Christian diocese meant a single bishop's own territory, not the larger grouping of provinces the term had named under Diocletian.
The Council of Nicaea in 325 assumed this territorial structure was already in place when its sixth canon confirmed the standing of the bishops of Alexandria, Rome and Antioch over the wider regions around them, an early attempt to regulate which bishop outranked which within a shared civil geography. The correspondence between civil and ecclesiastical boundaries was never exact and drifted further apart as the empire's own administration decayed in the West, but the vocabulary survived the collapse of the system that produced it, so that dioceses across Europe still trace, however loosely, lines a Roman emperor drew for tax and army purposes rather than for worship.