A WordPress slug is the part of the permalink or URL that (usually) describes the post, page, or archive in a few words. Often the slug is derived from the page’s title. In the permalink “http://www.example/category/green-widgets/” the slug is “green-widgets.”
The word “slug” is derived from the print industry, where a slug is a “short name given to an article in production.”*
*Slug (publishing). (2014, April 3). In Wikipedia, The Free Encyclopedia. Retrieved 22:36, September 19, 2014, from https://en.wikipedia.org/wiki/Slug_(publishing)