Level of Detail (LOD) is the principle of having lower-detail versions of models in memory and switching to them when the object is small/distant. This saves a lot of unneeded processing power at the cost of a not too big memory/disk size increase.
Model LODs change instantly. Be careful that your LODs do not create visual noise when changing, it can be distracting. An example of this can be seen on some tree props in Water Hazard.