This word came officially into being as a result of a resolution passed at the meeting of the International Astronomical Union in Prague on 24 August 2006. It refers to a class of objects in the solar system of which Pluto is the type sample.
With the resolution, astronomers have ended a controversy that has been simmering for decades over the status of Pluto. The causes were Pluto’s anomalous situation and the development of modern observational astronomy. In 1930, Clyde Tombaugh discovered Pluto orbiting beyond the then known limits of the Solar System, a discovery that was a sensation at the time. Because initial estimates of its size were much too big, it was included with the other planets. Later observations found it was only half the diameter of Mercury, one fifth that of Earth, and that its orbit was extremely eccentric, occasionally even coming inside that of Neptune. In recent years many similar objects have been found even further out, in the distant part of the Solar System called the Kuiper Belt, at least one of them larger than Pluto.
The official definition:
A dwarf planet is a celestial body that (a) is in orbit around the Sun, (b) has sufficient mass for its self-gravity to overcome rigid body forces so that it assumes a hydrostatic equilibrium (nearly round) shape, (c) has not cleared the neighbourhood around its orbit, and (d) is not a satellite.
The same resolution formally defined Pluto as a dwarf planet, effectively demoting it from its status as a member of the main planetary club of Mercury, Venus, Earth Mars, Jupiter, Saturn, Uranus, and Neptune.