What type of diction is used in the poem Ozymandias by Percy Bysshe Shelley?

Diction means choice of words.  The diction in Ozymandias is lofty, slightly unusual, and it paints vivid pictures.

By "lofty," I mean the author often chooses longer words that would be familiar to an educated person.  For example, the author uses "antique" instead of "ancient," "visage" instead of "face," and "colossal" instead of "huge."  This is formal, classroom diction, not the diction of the home or street.

Sometimes the poem uses a word that is not exactly loftier than the expected word, but it is a little different.  For example, the fallen statue is called a "wreck" instead of a "ruin" as we would expect.  Wreck is more often applied to ships, not ancient stone statues.

Sometimes these slightly odd word choices help the rhythm or rhyme of the poem.  For example, "Nothing beside remains." If the poet had written, "Nothing else remains," that line would not have had the right number of syllables.  "The lone and level sands stretch far away" sounds better than "The lonely, level sands stretch far away."  Stone in a desert does not really decay, but "Round the decay" rhymes with "far away" later, and matches it thematically as well. 

Finally, sometimes the author's diction allows him to paint a vivid picture more quickly than with more ordinary words.  "Two vast and trunkless legs of stone" is more concise than saying "The two remaining legs of a huge statue, the rest of which has fallen down," and it is more vivid too, since it emphasizes both the size and oddity of the legs.  "Those passions ... Which yet survive, stamped on these lifeless things" is more concise and more vivid than saying "The subject's attitudes, which are still clearly visible on the face of the statue."