Reduction in rank

Reduction in rank may refer to two separate concepts:
 * In military law, a reduction in rank is a demotion in military rank as punishment for a crime or wrongdoing, imposed by a court-martial or other authority. It may be imposed in conjunction with other punishments, such as a bad conduct or dishonorable discharge, loss of wages, confinement to barracks, or imprisonment in a military prison.
 * Reduction in rank may also refer to the voluntary, non-punitive practice of taking another rank, often as part of joining another military unit or military service. For example, those who join the Special Air Service or Australian Special Air Service Regiment take the rank of trooper, often a lower rank than their previous rank but with greater pay, prestige, and responsibilities.

History
Reduction in rank (Latin gradus deiectio meaning position degradation) was used as a Roman military punishment. 

United States
The Uniform Code of Military Justice Subchapter III, non-judicial punishment, § 815. Article 15, commanding officer's non-judicial punishment, authorizes commanding officers to "in addition to or in lieu of admonition or reprimand" impose "reduction to the next inferior pay grade, if the grade from which demoted is within the promotion authority of the officer imposing the reduction or any officer subordinate to the one who imposes the reduction." Additionally, an officer of the grade of major, lieutenant commander, or above is authorized to impose "reduction to the lowest or any intermediate pay grade, if the grade from which demoted is within the promotion authority of the officer imposing the reduction or any officer subordinate to the one who imposes the reduction, but an enlisted member in a pay grade above E-4 may not be reduced more than two pay grades."

Uniform Code of Military Justice Subchapter VIII, Sentences, provides that: "§ 858a. ART. 58a. SENTENCES: REDUCTION IN ENLISTED GRADE UPON APPROVAL (a) Unless otherwise provided in regulations to be prescribed by the Secretary concerned, a court-martial sentence of an enlisted member in pay grade above E-1, as approved by the convening authority, that includes-- (1) a dishonorable or bad-conduct discharge; (2) confinement; or (3) hard labor without confinement; reduces that member to pay grade E1, effective on the date of that approval. (b) If the sentence of a member who is reduced in pay grade under subsection (a) is set aside or disapproved, or, as finally approved does not include any punishment named in subsection (a)(1), (2), or (3), the rights and privileges of which he was deprived because of that reduction shall be restored to him and he is entitled to the pay and allowances to which he would have been entitled for the period the reduction was in effect, had he not been so reduced."

Notable examples of demotion in rank in the US Forces

 * Admiral Husband E. Kimmel (1882 – 1968) was reverted to rear admiral upon retirement due to his role in the Attack on Pearl Harbor.
 * Admiral Richard C. Macke was reverted to rear admiral and forced into early retirement due to his statements about the 1995 Okinawan rape incident.
 * Brigadier general Janis Karpinski was reverted to colonel due to her role in the Abu Ghraib torture and prisoner abuse.