Terry towelling is a soft material that is often used in baby nappies (or diapers).
By labelling someone a "terry cloth" you are indeed accusing them of being "very soft", or as eloquently put by Jim Jones at the end of Hate Me Now (a Nas diss by Cam'Ron ft Jim Jones), a "pussy ass nigga wit a dick".
A very nice cloth, can be used for anything but mostly for cleaning up very expensive wines.
Terry: Pleasepass me that terry cloth.
Barb: You named your cloth after yourself?
Terry: Yes and no Barb it's complicated.
Barb: How do you mean?
Terry: It's always been called a terry cloth but also I name all my cloth's Terry. Will you pass the cloth this burgundy is going to stain the carpet!
It is said of the situation where a person has the bad luck to make contact with his testicles against an undefined surface or object, intentioned or not.
Given the nature of the word, it is more appropriate to design cases where the interaction is made with a moving object, for example, a ball.
Although it is extremely painful for the victim, it tends to be considerably funny to people who witness it.
Today in the baseball game the pitcher took a nutshot; the baseball hit him in the nuts.
Man, I just watched the funniest nutshot video ever.