If you are being given a chance at informal juvenile diversion, it is a fantastic way to keep this off your record. The Probation department can let you attend a variety of programs such a the diversion they are offering you (others include a program called ShortStop, etc.) instead of referring the case to the District Attorney's office for prosecution. Without prosecution, there is no court case.
The above answer is for general information only and is based on the information you posted. Every case is fact dependent, so to get a thorough analysis of your situation, you will need to consult face to face with an attorney licensed to practice in the jurisdiction where the incident took place. Do not conclusively rely on any information posted online when deciding what to do about your case.
It means your case is not going to be filed in juvenile court. You need to complete the community service and attend a diversion program so this will never show up on your rap sheet. Unfortunately, the arrest may still show up if you were actually formally arrested by the police. Good luck!
Juvenile diversion is generally handled completely outside the court system through the probation department. If you successfully complete the program, you will have no juvenile record. Good luck.
I would agree with other answers that you should go along with diversion. the purpose of diversion is to keep crimes off your record and to divert you from ending up in the criminal justice system. If you are a juvenile and the problem is only shoplifting, the case will not end up on your adult record in any event and juvenile court is not open to the public. However, more serious juvenile matters can find their way onto your record. If you complete an informal juvenile diversion matter, that usually means the case does not even get filed in Juvenile Court and you do not end up on probation or having a probation officer.