Divide and conquer terminology for improving / troubleshooting hardware

What you're describing is procedurally (or conceptually) similar to a binary search.

From an article on Brilliant:

Binary search works by comparing the target value to the middle element of the array. If the target value is greater than the middle element, the left half of the list is eliminated from the search space, and the search continues in the right half. If the target value is less than the middle value, the right half is eliminated from the search space, and the search continues in the left half. This process is repeated until the middle element is equal to the target value, or if the algorithm returns that the element is not in the list at all.

In a standard binary search, using an array with alphanumeric elements, the elements are first sorted. But in terms of troubleshooting hardware, the idea of "sorting an element" is somewhat meaningless and unnecessary. Also, a binary search works on exactly half of an array during each iteration—something which will likely not be the case with hardware troubleshooting.

The general approach is the same, however. You eliminate variables from the overall field of possibilities, then continue to apply the same process to the remaining variables until the culprit is identified.

The term "divide and conquer" is applicable, because you are dividing hardware components into groups—and then eliminating all suspect components in one group or the other en masse.

What you're doing is not actually a binary search, but it carries the same general meaning.