Assimilation is defined as:

Assimilation is best understood as the process through which a minority group gradually adopts the customs, values, and behaviors of the majority population, often leading to a decreased distinction between the two groups. This process typically results in the minority group losing some of its original cultural characteristics in favor of those of the majority culture. It emphasizes acceptance and integration into the dominant culture, facilitating social cohesion and interaction.

In the context of the other options, the merging of different cultures without losing unique identities refers more to multiculturalism rather than assimilation, which implies a loss of distinct identities. The establishment of completely separate cultural identities would not align with the concept of assimilation, as it focuses on cultural separation rather than integration. Lastly, the process of cultural exchange pertains to mutual influence and interaction between cultures, rather than the one-sided adoption characteristic of assimilation. Hence, the correct understanding of assimilation emphasizes the adoption of the majority group's culture by the minority group.