Below is an excellent definition of defamation, which is on pages 104-05 in the ACLU's handbook on "The Right to Protest":
Defamation is any false factual statement about a person which tends to harm the reputation of that person by lowering the community's estimation of him or her or deterring third persons from wanting to associate or deal with that person. The most common examples of defamatory statements are assertions of criminal, illegal, or corrupt acts, charges of fundamental incompetence or unfitness for one's profession, and charges of mental illness or immoral behavior. Libel is defamation by written word or other relatively permanent communication; slander is defamation by spoken word.
There is no federal law of defamation, but each state is free to define defamation and provide the target of a defamatory statement the right to sue and recover damages. The First Amendment comes into play because the courts have used it to impose substantial limitations on the states' power to permit defamation lawsuits. The theory is that the more difficult it is to bring and win a defamation suit, the more protection there will be for robust free speech and press, especially discussion and criticism of public officials, because speakers, writers, and protestors won't have to fear that any misstatement that harms reputation will lead to the possibility of a damage suit.
But the Court has refused to say that defamation suits are always barred by the First Amendment. Instead, the Court has struck a balance -- permitting some defamation suits in order to protect the individual's important interest in reputation and personal integrity, while imposing restrictions on such lawsuits to protect free speech rights.
The essence of a defamation suit is that false and derogatory statements of a factual nature were made, either knowingly, deliberately, or recklessly (which is extremely hard for the plaintiff to prove), or carelessly (which is somewhat easier to substantiate). The plaintiff complaining of a defamatory statement must prove one of these different levels of fault, depending on whether the statement was about a public official, a public figure, or a public issue, on one hand, or an ordinary person and a private matter, on the other.
Additionally, on page 108 on the subject of a private person suing for defamation, the book states: "Moreover, if a private person is defamed over a matter that is not of general or public concern, it is even easier for the plaintiff to recover damages. (footnote omitted) But since most statements by protestors criticizing private people probably relate to matters of public interest, protestors probably need not worry about this possibility."
To those who are interested, the subject of defamation in the handbook covers ten pages and the book itself can be purchased on the ACLU's website. Personally, I have a mixed opinion of the ACLU, but the materials they publish are worth the purchase price.