Distribution is a new cache mode in Infinispan, in addition to replication and invalidation.  In a replicated cache all nodes in a cluster hold all keys i.e. if a key exists on one nodes, it will also exist on all other mpdes.  In a distributed cache, a number of copies are maintained to provide redundancy and fault tolerance, however this is typically far fewer than the number of nodes in the cluster. A distributed cache provides a far greater degree of scalability than a replicated cache. 

A distributed cache is also able to transparently locate keys across a cluster, and provides an L1 cache for fast local read access of state that is stored remotely.  You can read more in the reference guide.