OK, the circuit is a radio receiver, the diode is for demodulating an AM signal. The inductor will be a single coil, with the diode tapped into it part way along. The diode load appears across the coil, loading it, and dropping the Q, which impacts on selectivity.
By tapping part way down the coil, you are able, by transformer action, to step the load impedance up so that the total impedance seen across the coil is higher.
Look up tuned circuits with tapped inductors or split capacitors as a way of maintaining a high Q
Cheers,
Richard