Source : Webster's Revised Unabridged Dictionary (1913)

Demoralization \De*mor`al*i*za"tion\, n. [Cf. F.
   d['e]moralisation.]
   The act of corrupting or subverting morals. Especially: The
   act of corrupting or subverting discipline, courage, hope,
   etc., or the state of being corrupted or subverted in
   discipline, courage, etc.; as, the demoralization of an army
   or navy.

Source : WordNet®

demoralization
     n 1: destroying the moral basis for a doctrine or policy [syn: {demoralisation}]
     2: a state of disorder and confusion; "his inconsistency
        resulted in the demoralization of his staff" [syn: {demoralisation}]
     3: depression resulting from an undermining of your morale
        [syn: {demoralisation}]