Taffy is an acronym that means something is really cool or awesome. The word comes from the saying "Tits As Fuck, Yo". If something is cool, it can be called "the tits" or "cool as fuck". This phrase combines the two, and becomes "Tits As Fuck, Yo", or simply Taffy.
Guy 1: Did you just see that Ferrari drive by? That thing was sweet!
A derogetory term for someone from Wales. Actually, the derivation of this word is as follows (from the racial slur database): "The Taff is the name of the river that runs through Cardiff, the capital of Wales. Also from a poem that starts: "Taffy was a Welshman, Taffy was a thief...." Another explanation is that Taffy is based on an English pronuciation of the common Welsh first name, "Daffyd" (David)."