Faggy Waggy is basically just a less offensive way of calling someone a faggot that also makes you seem as if you're looking down at them due to it's childish tone. It works most efficiently if someone is complaining about something childish, or just anything in general.
A phrase used by the goddess randytaylor. The precise meaning is unspecified, but it can be assumed that it means something or someone is flaming with homosexuality. (e.g a flamer)