Stolen right from
Wikipedia----------------------------------------------------------------
In gaming, a Munchkin is a player who plays what is intended to be a non-competitive game (usually a role-playing game) in an aggressively competitive manner. A munchkin seeks within the context of the game to amass the greatest power, score the most "kills," and grab the most loot, no matter how deleterious their actions are to role-playing, the storyline, fairness, logic, or the other players' fun. The term is used almost exclusively as a pejorative and frequently is used in reference to powergamers and to immature players in general.
The term was applied originally to young gamers by older players, presumably because the connotation of being short and ridiculous (like the Munchkins in the book and film The Wizard of Oz) made it an apt label for the childish gamers it was applied to. However, before long it came to refer to anyone who engaged in a juvenile gaming style no matter their height, age or experience. Suggestions that the term appeared first on BBS and Internet forums in the late 1980s as "muchkin," to describe someone who wanted his character to have as much of everything as possible, and that it subsequently gained an additional N via misreadings and mistypings [1], can be discounted, since the term was already in use and needing no explanation on usenet groups by 1984.
Munchkins are infamous for various degrees of cheating, willfully misinterpreting rules that work against them while loudly proclaiming ones that work in their favor. As a matter of course they selectively obey the letter of rules while perverting the spirit blatantly. The worst munchkins will cheat shamelessly, ignoring inconvenient numerical modifiers and fouling dice throws till they get the result they want. During character creation, munchkins engage in vicious min-maxing, leading to exceptionally unrealistic or unusual characters who make no sense except in terms of raw power.
Munchkins are often accused of roll-playing, a pun on 'role' that notes how munchkins are often more concerned with the numbers and die rolls than with the roles that they play.
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These are my people. I should worry.
:-)