"Ping" is a a measure of the latency between your computer and the hosting server. It's measured by sending a message to the host, and counting how long it takes for the host to send a response (in milliseconds). The higher your ping, the more lag you will experience while playing.
Ping was originally just a small application used to see if another computer is online. It was called a Packet Internet Groper, which was shortened to PING, which subsequently became an verb 'to ping a computer'. Like others have already said - online games use a 'ping' to measure the time it takes for piece of data to get to and from a computer (typically the host server for an online match)....latency.
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