(verb.) To retroactively redefine a well-established and imagined background story (or actual, real-world history)in such a way that it invalidates the results of that history or story.
Also selectively remembering details in a way that presents the rememberer in a finacially advantageous light.
Can also be used an an adjective.
See also Luca$
Originates with George Lucas's Star Wars movies, episodes I through III, which revise many of their secondary characters' backgrounds to such an extent that many of their actions in the original films (episodes IV through VI) make almost no sense.
The costuming in the second and third Matrix movies was excellent. It's too bad that the plotlines got lucassed all to hell.