(n)This is a slang term for the female genitalia-- more specifically, the labia minora-- so termed for it's resemblance to stretched (pink) laffy taffy. Therefore, the term may also carry with it connotation of excessive sexual intercourse which can result in a stretched or elongated labia minora.
That ho had so much sex, when she spreads her legs, Willy Wonka himself would envy her Laffy Taffy.
Another name for "roast beef" which is when a girl's labia minor/majora are stretched out and tend to look like laffy taffy when it is sucked on and stretched out even more.
This can be seen in any porn flick and is definitely not an allusion to a girls posterior. A nice badunkadunk does not look anything like laffy taffy and laffy taffy stretched out looks similar to a well used labia also both are eaten the same way.