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It's called the National Diet or simply Diet. The word "diet" comes from a Latin word that originally meant a day-long meeting (Diet is related to the Latin "dies" meaning "day"), and was used to refer to the parliaments convened of the Holy Roman Empire: the Diet of Worms, the Diet of Augsburg, etc.
Because Japan is a empire (monarchy) with an emperor as its head, "Diet" was chosen as the translation in English because of the tradition of using "Diet" for the Holy Roman Empire.
In Japanese, the Diet is called the Kokkai, written in kanji as (which literally means "National Meeting" or "National Diet").