Let's now take a step back to the sampled voltage we mentioned earlier. What we have is an electric signal which varies continuously; let's suppose we collect a voltage-sample which, in order for it to be converted into digital, must necessarily be approximated into an integer number seeing that we can't use infinite amounts of binary digits to represent it.
In quantization, every sample gets quantized at a value which is an approximation of its real value. This is where the operation of conversion into digital of an analogue signal introduces a degradation. The voltage-value gets picked up by an apposite circuit which causes an error that is greater the lower the quality of the circuit itself.