The term "one word" is used in place of the term "gay," usually in Politically correct environments such as offices or family dinners. The usage of the term "gay" in this instance refers to lame situations, not someone's sexual orientation.
The term only works when the speaker and the listener are both familiar with one another's lingo.
Ernie: Hey Frankie, how was the weekend?
Frankie: Oh, it was pretty bad. My girlfriend made me watch Titanic and then she started singing along with that crappy Celine Dion song...
Ernie: One word.
Frankie: Indeed. One word.