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The action or a process of iterating or repeating an action or process; a procedure in which repetition of a sequence of operations yields results successively closer to a desired result. (Oxford English Dictionary)
Oxford English Dictionary. s.v. "Iteration."
This dictionary definition captures the essential idea of repeating an action in order to get closer to the answer we need.
Iteration is used as a generic term for successive application of a systems approach to the same problem situation, learning from each application, in order to progress towards greater stakeholder satisfaction.