In the world of multi-player gaming, merced is used in much the same way that "pwned" is. It is typically used to denote domination or (at the very least) a kill of another player. The word originates from the root word mercenary.
It is also a term that is tossed around quite haphazardly among gamers for feats that are not really all that impressive. A minor kill streak or a narrow victory over an opposing team does not really rise to the level of merced, but that does not stop noobs from using it anyway. (see definition of Noob for details)
Gamer 1: Damn dude, I hate that map, I just got friggin merced.
Gamer 2: All good, we we rape these camper bitches in the next round.
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