Designer’s glossary: design space
\ dɪˈzʌɪn speɪs \
Design space is a measure of how many meaningful* variations of a mechanic or effect can exist within a game. When applied to a game, it also describes the amount of mechanics that the rules can support. Often, testing out the different variations of a mechanic/effect is referred to as exploring the design space of that mechanic. Design space itself is often described as wide or narrow.
*Mostly refers to the variants being functionally distinct in gameplay.
As an example of different levels of design space within the same game, we can take Monopoly (and pretty much all its clones). In Monopoly, the properties themselves aren’t a mechanic that has a lot of design space—there’s only so much one can change about their parameters without adding new ones or changing the existing rules surrounding them. In contrast, the Chance cards have a massive potential design space. Since they can pretty much change the state of the game in any way, the number of functionally different Chance cards one can make is pretty big.
Important note: mechanics with more design space aren’t automatically better than mechanics with less. Often, more specialized mechanics that don’t necessarily have many possible variations are just as important for the game as something more expandable.