Stat of a hero that provides protection from Physical damage. The more armor a hero has, the more reduction in damage it provides.
Chiron with 159 armor receives an Auto-Attack for 183 physical damage. Cassandra then uses "Proph-Icy" to increase his armor by 44. He now, at a total of 203 armor takes 156 physical damage on a 2nd Auto-Attack.
From this scenario, we can conclude that an increase of 44 armor from an armor value of 159, or + 27.67%, reduces his damage taken from physical attacks by 14.75%. At lower base armor values that addition of armor would be more beneficial.
- ARMOR- DMG Taken(PHY)
As you can see , as armor increases, one receives less and less of a benefit. If this was graphed it would be in the shape of a log curve. This is the idea of how diminishing returns works; as one stat goes up more and more(armor), the other stat is correlated and goes up also, but considerably less and less(PHY dmg taken).