A mugglepuff is the worst thing you can call a person. It's not like bitch or asshole, where there is an actual definition. It's a word that has such a bad meaning that you can't even describe. It's just bad.
It comes from the word muggle, a name for a non-magical person, and Hufflepuff, one of the four Houses of Hogwarts. A hufflepuff (one sorted into Hufflepuff house) is an embarrassment to witchcraft and wizardry and Hufflepuff house is often hated by the much superior Slytherin, Ravenclaw, and Gryffindor Houses.
Worst word known to mankind.
Also known as "It-That-Shall-Not-Be-Said", "The Dark Word" or "You-Know-What"
Harry Potter: You...You...MUGGLEPUFF.
Voldemort: Oh no you di-idn't! Bellatrix, hold my cloak, shit just got real.
Dolohov: I can't believe he just said "You-Know-What"
Yaxley: Shit is going down, I'll get some popcorn.