This dictionary is a summary from the old Fanfiction Terminology page on Wikipedia and A Fanspeak Dictionary.
Have any additions you feel should be here? Use the contact form, and be sure to state your business in the subject.
Anti-Mary Sue - Product of an author doing everything that he/she can to prevent their character from becoming a Mary Sue.
AU - Alternative universe, a story that makes major changes to the canonical storyline or premise. The change must be something that would be extremely unlikely to happen in canon.
Beta - To edit and comment on someone else's work before it's finalized.
Beta-reader - Someone who edits a story upon the author's request.
Canon - The "official" source material upon which fanfiction can be based.
Canon rape - When the author twists the canon characters, setting, etc. so far out of alignment that it burns to read.
Challenge fic - Any story written as the result of a challenge.
Character death - A warning telling that one or more major characters die.
Crossover - A story which straddles two different fandoms. Can be as close to mixing characters from different universes within a genre (i.e. Batman/Wolverine) or as wildly disparate as you can imagine (i.e. Buffy/Teletubbies).
Darkfic - A story involving a large amount of death/pain/trauma being inflicted on the characters, often to force out characterization.
Erotica - A highly subjective term often used to differentiate "tasteful" or "classy" x-rated stories from "trashy porn".
Fandom - Refers to people who enjoy a story or game and actively interact with others who share the same love for the media. A collective term used to describe all fans and their activities.
Fanon - Refers to invented (non-canon or not verified as being canon) facts or situations. Information or characterization that has never been confirmed in canon, but is accepted as such by fans.
Femslash/Femmeslash - Same-sex pairing, specifically female pairings.
Fluff - A genre in which the story is devoid of angst and takes on a mood of light-hearted romance.
Het - Heterosexual pairing.
IC - Acronym for In-Character. Refers to the behaviour of (usually canon) characters which seem logical given what is known about them and their previous behaviour in canon.
Lemon - Japanese slang-term meaning "sexy". It is a fic containing gratuitous sex; some sources say it comes from the pornographic "Cream Lemon" anime series.
Lime - A fanfic involving non-explicit sexual situations, a tasteful "fade to black".
Mary Sue - Refers to characters perceived as being badly-characterized and unsympathetic, often written in a cliché manner. Mary Sues lack any significant or noteworthy flaws. She is always beautiful, has amazing skills/powers, gets into a love affair with an existing character, or (usually) all of the above.
Nextgen - Next generation, a tale focusing on the children/descendants of canon characters.
OC - Original character, a character created by the author of the fanfic.
OFC - Original female character.
OMC - Original male character.
OOC - Out of character, refers to the behaviour of (usually canon) characters in the story itself whether or not they seem "in-character".
Original fiction - The opposite of fanfiction, wholly original works of fiction.
Plotbunnies - You have been attacked by a plotbunny when you have a story concept that really doesn't go anywhere, but you have to write it down.
POV - Point Of View, specifically in fanfic, a type of story told first-person from a character's point of view.
PWP - "Porn Without Plo" or "Plot? What Plot?", indicates or implies that a fanfiction contains little or no original story, but instead acts merely as a vessel for pornographic scenes. It can also be an indication that the story is simply a story without a set plotline.
Ratings - An author- or archivist-applied system which lets readers know what they're in for before they start reading a story.
Shipping - Romantic or erotic involvement.
Slash - Same-sex pairing. Male pairings are the most common. Female pairings are often referred to as "femslash" or "femmeslash".
Smut - Porn, but in a light amused "yeah, gimme some of that" sort of way.
Smutfic - Lemon story without much plot other than sex. Also known as PWP.
Smushing - Refers to the practice of combining the names of the two characters being paired romantically, creating a new term to indicate that specific pairing.
Songfic - A genre in which an author takes an existing song and uses the lyrics to generate the theme of his or her story. Songfics are usually one-shots.
WIP - "Work In Progres", a story whose ending has not yet been written or a rough draft which has not been thoroughly beta-read.