It is from the publishing world from wikipedia:
In newspaper editing, a slug is a short name given to an article that
is in production. The story is labeled with its slug as it makes its
way from the reporter through the editorial process. The AP Stylebook
prescribes its use by wire reporters (in a "keyword slugline") as
follows: "The keyword or slug (sometimes more than one word) clearly
indicates the content of the story."[1] Sometimes a slug also contains
code information that tells editors specific information about the
story — for example, the letters "AM" at the beginning of a slug on a
wire story tell editors that the story is meant for morning papers,
while the letters "CX" indicate that the story is a correction to an
earlier story.[2][3] In the production process of print
advertisements, a slug or slug line, refers to the "name" of a
particular advertisement. Advertisements usually have several markers,
ad numbers or job numbers and slug lines. Usually the slug references
the offer or headline and is used to differentiate between different
ad runs.
From there, the slug for web publishing was born as an effort to make more semantic URLs. This is the slug as used in django:
Some systems define a slug as the part of a URL that identifies a page
in human-readable keywords.[4][5] It is usually the end part of the
URL, which can be interpreted as the name of the resource, similar to
the basename in a filename or the title of a page. The name is based
on the use of the word slug in the news media to indicate a short name
given to an article for internal use. Slugs are typically generated
automatically from a page title but can also be entered or altered
manually, so that while the page title remains designed for display
and human readability, its slug may be optimized for brevity or for
consumption by search engines. Long page titles may also be truncated
to keep the final URL to a reasonable length. Slugs are generally
entirely lowercase, with accented characters replaced by letters from
the English alphabet and whitespace characters replaced by a dash or
an underscore to avoid being encoded. Punctuation marks are generally
removed, and some also remove short, common words such as
conjunctions. For example:
Original title: This, That and the Other! An Outré Collection
Generated slug: this-that-other-outre-collection
Django provides a slug field, and in its documentation provides a definition as well:
Slug is a newspaper term. A slug is a short label for something,
containing only letters, numbers, underscores or hyphens. They’re
generally used in URLs.
