All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His slave and Messenger.
Diyyah (blood money) is an Arabic word that means "rendering".
In Islamic terminology, Diyyah is the term used to name the money that is due on a person in compensation of a murder or a capital offense.
As for its importance in Islam, Allah legislated the Diyyah to protect the rights and console the family of the offended, as well as to ward off and dissuade people from committing such crimes.
The Diyyah is also an expiation (Kafaarah) if the person who committed the offense did so by mistake.
For more benefit on Diyyah (blood money) in Islam, please refer to Fataawa 384850, 91306, and 101103.
Allah knows best.