What It Means
Growth and IDCW are the two ways a mutual fund scheme can handle the profits it earns. Under Growth, profits stay invested in the fund and simply show up as a rising NAV over time. Under IDCW (Income Distribution cum Capital Withdrawal, the name SEBI gave the option formerly called "Dividend" in 2021), the fund periodically pays out a portion of its gains in cash directly to you, and the NAV drops by roughly that payout amount on the payout date.
How It Works
Both options invest in the identical portfolio; the choice only changes how and when you receive the fund's returns, not what the fund itself does. An IDCW payout isn't a bonus on top of your returns, it's your own money being paid back out of the fund's value, which is why the NAV falls when it happens. IDCW payouts are added to your income and taxed at your income tax slab rate, with tax deducted at source (TDS) above a threshold.
Warning
A common mistake is treating an IDCW payout as extra income the fund gave you for free. It's a withdrawal of value that was already yours, reflected immediately in a lower NAV, not a gain on top of the Growth option's return.