Source : Webster's Revised Unabridged Dictionary (1913)

Dado \Da"do\, n.; pl. {Dadoes}. [It. dado die, cube, pedestal;
   of the same origin as E. die, n. See {Die}, n.] (Arch.)
   (a) That part of a pedestal included between the base and the
       cornice (or surbase); the die. See Illust. of {Column}.
       Hence:
   (b) In any wall, that part of the basement included between
       the base and the base course. See {Base course}, under
       {Base}.
   (c) In interior decoration, the lower part of the wall of an
       apartment when adorned with moldings, or otherwise
       specially decorated.

Source : WordNet®

dado
     n 1: panel forming the lower part of an interior wall when it is
          finished differently from the rest [syn: {wainscot}]
     2: the section of a pedestal between the base and the surbase
     3: a rectangular groove cut into a board so that another piece
        can fit into it
     [also: {dadoes} (pl)]

dado
     v 1: provide with a dado; "The owners wanted to dado their dining
          room"
     2: cut a dado into or fit into a dado
     [also: {dadoes} (pl)]