Unlike the other people who have posted definitions that are ridiculous, do not have substantial backing, or are simply mis-informed, I will give the complete definition of what "pwned" means.
1. The origins of "pwned" are debated but there is ownly one possible source:
a. When playing a first person shooter game online, and you find yourself with no ammunition left in your primary weapon, you find yourself having to switch to your secondary weapon, aka your pistol. Being heavily outmatched versus an automatic weapon, when the player with the pistol kills the automatic weapon user in convincing fashion, it is usually followed by a string of text "Pwned!" meaning, 'Pistol-Owned.'
P is for Pistol? Get it.
1. The origins of "pwned" are debated but there is ownly one possible source:
a. When playing a first person shooter game online, and you find yourself with no ammunition left in your primary weapon, you find yourself having to switch to your secondary weapon, aka your pistol. Being heavily outmatched versus an automatic weapon, when the player with the pistol kills the automatic weapon user in convincing fashion, it is usually followed by a string of text "Pwned!" meaning, 'Pistol-Owned.'
P is for Pistol? Get it.
by john himself July 4, 2005

When some n00b on a video game, gets hella owned; amazing owned, liek the noob got screwed up the anus x10
by Davey :) April 13, 2006

As many other definitions state, this is a corruption of the term owned. However, this term has several advantages over owned, the main one being it has no conotations with the rather touchy subject of slavery. People will also think you cool for using 1337 hacking lingo now used mainly by preteen video game players, including my brother.
Fag: Yeah i owned you!!
Large Angry Black Man: You shouldda used pwned sucka!!
*Fag squeals in pain and terror
Large Angry Black Man: You shouldda used pwned sucka!!
*Fag squeals in pain and terror
by Tom the Enchanter September 15, 2005

Pwned: The complete shut down or domination of a person place or thing. It is commonly used as a derogatory way of saying "owned" which originated from the word "own" it is commonly used in places such as: Hawaii, Japan, Mexico, etc.
Guy 1: Dude I almost got some sweet puss last night.
Guy 2: What happened?
Guy 1: She whopped out a chode
Guy 2: OH MAN! YOU GOT PWNED!!
Guy 2: What happened?
Guy 1: She whopped out a chode
Guy 2: OH MAN! YOU GOT PWNED!!
by Chode-slurper May 14, 2009

pwned: verb;
to win at something and "pwn" the other contestants; or to be "pwned" when losing a game, etc.
to win at something and "pwn" the other contestants; or to be "pwned" when losing a game, etc.
by galena April 6, 2007

There is a common misconception saying that it's pwned because the O key is next to the P and people mean to write owned, but accidentally write pwned, and the name stuck. This is far from true. Pwned really means "Permanently Owned".
Mary: Jason, you're such a waste of everyones time. Go crawl in a hole and die.
Jason: ...
Bob: Dude, you just got pwned. (permanently owned)
Jason: ...
Bob: Dude, you just got pwned. (permanently owned)
by duuuddeeeeee15 September 27, 2010

Legend has it that in the World of Warcraft, there exists an Orcish Dominatrix. Better not cross her path! They say that those who went searching for her have never returned.
On your knees!...(whack)...PWNED!!!
by RedBlade7 March 26, 2008
