To diminish the power or effectiveness of...
To make less potent.
Originally, this was a product line of foam based toys for children. It was adopted by the online gaming community to refer to the reduction in power of a game feature for the sake of balance.
This term is now seeing more widespread generic usage, usually in reference to mechanical devices, or personal powers within a business framework.
antonyms: Buff(v), Spike(v)
My dad totally nerfed my access to the internet. Life suxx0rz since the advent of the NetNanny!
Did you hear that Henley got Nerfed?? It's probably because he handled the Parker account so poorly.