Started with a spelling error in Warcraft where a message that was supposed to say "Player has been owned" was mis-spelled to "Player has been pwned"
It's spread from there, taking on different forms such as pwnd pwnage
pwns or pwnd
1) used in a game when someone has totally pwnd, usually against an inexperienced or less experienced player.
2) used to describe an epicly amazing item
3) used by computer nerds who cant think of anything else to say to diss someone else's mom.