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Typically applied to online regularly-changed/updated video games.

To "nerf" something means to reduce its 'power' or effectiveness within the game. Often times this is to solve some problem in the game (such as an 'overpowered' weapon/ability or super effective strategy), or to push the players in one direction or another (such as a new cosmetic/item/character).

Nerfs affect the 'meta' or prevailing strategy/characters/items used to win the game. In this way nerfs also give control to the developer of how the players play the game. i.e. nerfing a commonly used item to discourage the community from playing with it.

Some nerfs can be so drastic they change the very fundamentals of the game, and are often a contributing factor to the size of the playerbase, for good or bad.

Outside of games, this would again mean to reduce the things 'power' or 'effectiveness'. The exact analogy that gave birth to this term, is that of a Nerf Gun, compared to a real gun.
Oh man, they totally nerfed 'Titans Armor'! Guess I'll stop playing Golem now :/

They nerfed Irelia again?? Oh wait, its actually a buff. <-- (opposite of nerf)

Great, so now all the free-2-play guns are nerfed, guess I have to buy some to keep competitive. :(
Related Words
Nerled NERFED Nerded nerieds nerked nerleen narled Nealed Nealed it neeled
The term "nerfing" comes from the online gaming world of Ultima Online.

At one point in the game, the developers reduced the power of swords in melee combat.

This resulted in players complaining that it was like they were hitting each other with nerf bats, not swords.

From then on, if ever something gets made less worth while than it had been originally, it is considered 'nerfed'
"Oh man, they reduced the dmg on the berserker class and now it's totally nerfed!"

"Damn, the Devs nerfed those axe's real good!"
nerfed by Dave Elliott January 11, 2005
To disregard any stand operating procedures and or protocol, due to a "can do" attitude.
The new style of tape was totally Neried into production.
Neried by Lolken December 23, 2011
1. The act of ripping someone off 2. Pinching someones dope and/or cutting dope
That nigga got neiled, Neil served that nigga straight salt
Neiled by StreetzBwatchin July 18, 2017

neredity 

The scientific definition of when you take the "fangirling" skills learned on Tumblr. and apply them to real life.

Ex:
Friend one: They are the freaking cutest couple. I swear to flipping Mary Mother of Taco Jesus that I will smack the personality out of her if she says no when he asks her out. He's literally loved her since second grade!
Friend Two: Hashtag NEREDITY!
OMG I can't believe that I'm fangirling in real life but they're so freaking cute together and if she says no when he asks her out I will smack the personality out of her. Wait, OMG this is just like that article I read about neredity!
neredity by NEREDITY March 27, 2015
to become so excited after seeing or experiencing something nerdy that you ejaculate
Toby: I just saw the trailer for that new video game. It was so good! I nerded... all over the floor, it was messy.
nerded by heavy d 17 December 3, 2011