a dither fish is usually a school or shoal of active middle to upper water dwellers that are used to make shy fish feel more at ease in the tank. an example...say you buy a juvenile firemouth and the little guy stays hidden all the time. a school of a decent sized tetra or non-nippy barb or a group of platys swimming out in the open will let the firemouth know there are no predators around and the firemouth therefore should feel more safe in the tank and he should become more active.
a target fish (often thought to be the same thing as a dither fish) is a fish (usually a group) that is/are used to disperse aggression in a tank. an example....I used to keep my red terror pair in my 125 gallon tank without a divider. red terror males are known for violently beating on their mates and often times killing them. so, in attempt to avoid this I put in about 10 smaller convicts. the cons were fast enough and small enough to avoid any real danger from the larger red terrors, but having them in there to chase around kept the male's aggression away from the female.