This originated from people misspelling "own." Own is a verb. It is used in online video games. Usually in FPS or RTS games when someone is killed or beaten in a game by another person in the game. If you tell someone you just killed, "You just got pwned!" Then they will take it very offensively. It was made popular when an employee from "Battle.net" made an error while he was making a map, and he spelled "own" as "pwn", and that is when people started pronouncing it incorrectly as "pone."

It originated fromthe word "own" but since the P is right next to the O people confuse them. People in internet games would say "I'm gonna own you!" which would mean "I'm gonna beat you at this." or something to theat extent.

The word pwn originally comes from the infamous Alexander Alekhine (http://tinyurl.com/9byqo) who was one of the great Grandmasters of Chess. His dominating openings of using his pawns was to control the crucial center spaces of the board. During his matches, Alekhine was known to drink heavily and spout anti-semetic remarks. In a match in 1935 against a Dutch master named Euwe his drinking had gotten the better of him. Before starting the match he said to Euwe in a very broken heavily accented russian voice "I will pawn to your knight" (a common variation of his defense was to box his opponents knights using 2 pawns and his white bishop) which ended up sounding like "Evil pwn you tonight". Unfortunatly for Alehkine he gave away his gameplan which Euwe was able to take advantage of. Alehkine lost the match.
The word pwn has resurfaced from time to time in the chess community. It looks like it has finally found it's place in history along with it's founder Alehkine.

a typo of own meaning to dominate, especially in a sense of video game competition and insane poodle combat.

to beat someone on a video game. Usually used online.

To completely and utterly own; sometimes to overkill by overwhelming skill, or even luck.

what unicorns do all the time