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1.
A Fail Guild is an association of people under a "Guild Tag" in the game World of Warcraft that contains players of a disreputable sort. To qualify as a "fail guild," a guild must first be very badly behaved (publicly racist or homophobic), have members that have ninja'd a guild bank on another server, and all members must be defensive and condone their other members' asshat behavior. No amount of epics, raid progression, or well spoken players in a guild can remove the stain of asshatery that denotes a guild to "fail".
Mysteria on Baelgun was a Fail Guild
Sectum Et Impera on Muradin was a Fail Guild

by QwikofMuradin February 04, 2009
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