Who uses it: Writers and aficionados of fictional TV, movie and book characters
What it means: Non-professional fiction ("fan fiction") that uses characters created and copyrighted by others, in which the characters often do things their creators never imagined.
How you can use it: To describe an unoriginal elaboration on someone else's work.
"Fanfic" is a good example of a Term of Art because it's a term I hear writers use all the time, identifying a subculture that most people are entirely unaware of. Author Lee Goldberg, who writes authorized tie-in novels for the Diagnosis Murder and Monk series, campaigns against fan fiction on his blog, and until I started reading his blog, I had no idea of how passionate (not to say obsessed) the authors of fan fiction can be.
My first fiction efforts, in childhood, were attempts to write my own sequels to books I particularly loved: The Witch of Blackbird Pond, Johnny Tremain, A Little Princess. It was also obvious to me that Nancy Drew's and Trixie Belden's adventures followed predictable patterns, which I could probably imitate if I really wanted to. I never got very far with these efforts, but they taught me the first rule of storytelling: something has to happen. It's not enough just to describe the characters.
What happens in a lot of fan fiction, unfortunately, is pretty awful: fantasies of rape and physical assault, unlikely romantic pairings, deviant sexual behavior and more. These stories say much more about the dark, sad fantasies of their authors than about any innate attributes of the character...
So in that much, at least, they're just the same as mainstream fiction.