Used usualy in online games (or to take the piss on pictures) Pwnage is when someone is attacked with no hope of winning. Usualy someone with a lot of skill attackes a newbie or someone less skilled. Another spin off of pwned but usualy used for situation when overkill is involved. IE and air strike on one person.
In terms of eve online. One person is jumped on by a fleet and is pwned
with no hope of surviving. IE pwnage