Granularity is the extent to which a system is broken down into small parts, either the system itself or its description or observation. It is the extent to which a larger entity is subdivided—Wikipedia.
The most common granularities for a time dimension are:
Cognos TM1 cubes that store data at the monthly level of detail may have one or two time dimensions. If you have two, this would mean that you will have one dimension for the year and one dimension for the month.
Why would you have both a year and a month dimension, in the same cube?
Some of the advantages of separating the year and month into two dimensions include: