This is a term used primarily in prisons regarding skineheads, {aryans}, Nazis and just plain out white boys.
It started out as a derogatory word used by the African Americans in the South to refer to white men, but the white men eventually picked it up and started using it for theirselves.
Women are called "Featherwoods" It is the same reference.
That Peckerwood looks fine, he sure is a mighty fine nazi with his aryan look, he is sure to please all the fine featherwoods.
A lifestyle/state of mind of extreme mobbing, hardcore DGAFing, curbing, brotherhood, anarchy, brutality, gang violence, arson, not bros, etc.
1-" hey man you be Pepperwood Punks?"
2- "hell ya, you best be stepping out of our territory"
1-"right, we dont want any of your trouble"
2-"thanks officer."