Ownage is past tense for the act of "owning
" an opponent in a game of skill, in wich one player dominates the other with ease.
Used as an adjective, it describes/emphasizes the greatness, or great value of something. It can also describe severity.
The word is typically used over the internet, and is most commonly abundant in the computer gaming community; Even more specifically, the Half-life and Counter strike communities.