A MUD (originally Multi-User Dungeon, with later variants Multi-User Dimension and Multi-User Domain), pronounced /ˈmʌd/, is a multiplayer real-time virtual world described primarily in text. MUDs combine elements of role-playing games, hack and slash, player versus player, interactive fiction, and online chat. Players can read or view descriptions of rooms, objects, other players, non-player characters, and actions performed in the virtual world. Players typically interact with each other and the world by typing commands that resemble a natural language.
Traditional MUDs implement a computer role-playing game set in a fantasy world populated by fictional races and monsters, with players being able to choose from a number of classes in order to gain specific skills or powers. The object of this sort of game is to slay monsters, explore a fantasy world, complete quests, go on adventures, create a story by roleplaying, and advance the created character. Many MUDs were fashioned around the dice-rolling rules of the Dungeons & Dragons series of games.
Source: Wikipedia, "MUD", available under the CC-BY-SA License.