This word stands for "Not Intended As Offensive".
It is used as a disclaimer in typed dialog to convey that the previously or soon to be mentioned statement is a joke, or is an opinion and not an attack on anyone.
Also used for constructive criticism.
Typically used in one-time, open-ended communication such as a facebook status.
FB status: "Happy Hit A Heretic Day!" NIAO (joke)
YouTube comment: "This is NIAO, you sound like Justin Bieber when you sing." (opinion/constructive criticism)