Anal dilation includes all forms of relaxing and stretching the anus. Most people apply the term only if the anus is opened further than required for anal sex.
Anal dilation can be practiced in many ways. The most common method is using butt plugs, very slowly increasing the diameter of the toy, just like in preparation for anal sex. Stretching enough for anal sex is usually fairly simple and can be archived quickly. Going beyond that requires much more practice and patience. Any sharp pain is usually a sign good to slow down.
As with any other anal technique, special care needs to be taken in two aspects. First is internal injury. Do not use objects with sharp edges and make sure the object is not long enough to cause internal damage (more, see anal). The other thing to take care of is elasticity of the anus. If stretching is done too fast, the anus can lose elasticity. This can lead to anal leakage as well as continues pain in the tissue surrounding the anus.