A diminished triad is made up of two minor 3rd intervals. In Tertian harmony chords are built by stacking 3rds, there are two types of 3rds, major and minor. Minor is the smaller of the two and therefore when stacking two minor 3rds the chord that results is called diminished because the distance between the outer voices has decreased. A diminished triad is a smaller distance than Major, Minor or Diminished.