Disavow means to deny any responsibility for.
Google has a Disavow tool as part of it’s Webmaster tool set that you can use to tell Google of any backlinks you have coming into your site that you want it to ignore when it calculates your sites ranking.
You would do this when another site outside of your control has created a link to your site and you deem that sites connection would damage the reputation of your site in Googles eyes, therefore having a detrimental affect on your sites ranking.
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