An American pussy is a pussy that has very small pussy lips -or "labia minora"...
If the legs aren't wide open the pussy looks like a straight line and nothing hangs outside(Just like a young undeveloped one, we used to touch before the high school years.)...
Usually, for the full effect it has to be hairless.
Also, american pussies stay prettier over time, and don't become as saggy as big lipped pussies do...
Dude A: Dude, d'ya fuck that ho already?!
Dude B: Fuck yeah, and you know what?! She was fully loaded with an American pussy!!!
Dude A: Oh man, American pussy's da shiznit!
Dude C: Yeea!