- smut / smʌt / noun.
- 1. a particle of soot; sooty matter.
- 2. indecent language or publications; obscenity.
- 3. a disease of plants, esp. cereal grasses, characterized by the conversion of affected parts into black, powdery masses of spores, caused by fungi of the order Ustilaginales.
- —from Dictionary.com
In this context, smut is not a particle of soot or a disease of plants, but rather fiction with explicit sexual content. They are on the same level as lemons on the citrus scale. You should not be reading smut at work or school, as it is NSFW by definition. Really, really bad smut may even be NSFB.
Calling a piece of fiction "smut" rather than simply a lemon implies that the story is not "fic with sex" but primarily focused on the sex itself. It is common that a long romance fic may have one or more "lemon chapters," but it almost never has a "smut chapter," as the conflict of interests is too great. Smut is quite often PWP, or at least has very little plot. It is pornographic in nature and meant to be sexual fulfillment to the reader, though clever writers may more strongly tie it to canon and give it more value than simply the sex scenes.
As with any fanfic genre, smut runs the gamut from goodfic to badfic.
Good smut will at least be skillfully written, pleasing to read, invoking little squick or bad biology (unless a specific kink is invoked, at which point it should still be judged on its quality, not its specific fixations), and respect the home canon it's set in. Characters will be paired together reasonably, the action will be exciting and well-paced, and it may even be entertaining beyond its sexual content.
Bad smut is indecent, obscene badfic that ranges from strong implications of pornography to full-on, no-holds-barred, take-no-prisoners, oh-god-my-eyes-they-burn pornography. Characters are smashed together (often repeatedly, naked) with no regard given to whether or not they would or even could be copulating together in the first place. Tragically, poor quality writing actually impedes the enjoyment of the smut's audience, because it is harder to read and breaks the reader's involvement, making bad smut not only terrible and icky but also fairly pointless.
There is a wide range of smut on the badfic market, so to speak, ranging from the standard human intercourse, be it boy-on-girl, boy-on-boy or girl-on-girl, to interspecies rape smut (see "Celebrian"), homosexual-pedophile smut (see "To the Moon"), and dinosaur smut (see "Land Before Time: Littlefoot x Cera"). No canon, nor species, nor pairing is safe from the worst of smut. Because of its incredible potential to be completely and utterly OOC and canon-breaking, it should be noted that most of the Legendary Badfic list is made up of bad smut.