If a drug is suspended into 250 mg/ 5 ml suspension, 250 mg being the strength of the active ingredient. what do we call the 5 ml? is it the dilution?

Not exactly: The term 250 mg/5 ml is the concentration of the drug (the amount of drug in milligrams in a particular volume of liquid). In other words, a much greater concentration would be 250mg/1ml (meaning the entire dose is present in a very small volume), while a much lower concentration (ie more dilute) suspension might have 250 mg in 10 ml.