Something reeeeaaally disgusting.
Eew, look at the smugma in that trash can!
1) A cocky bacteria.
2) A form of describing an arrogant person by equating them with the cheese-like bacteria that accumulates beneath the foreskin of an unclean/unhygienic person.
Person A: What is up with that guy? He won't even stop talking on his bluetooth headset while the server takes his order!
Person B: Smugma.