A magical word
Muggle is a term that British author J.K. Rowling coined to describe ordinary people with no magical powers, as opposed to the wizards in her Harry Potter books. Muggles are often a hapless lot, bewildered by the magical events they witness.
Wikipedia quotes Rowling as saying that she made the word from mug. Mug, according to Wikipedia, is “an English term for someone who is easily fooled.”
Muggle is a fine example of how new words flow first into our common speech and then into our common writing. Will muggle make it into future dictionaries? Given the legions of Harry Potter fans worldwide, it stands an excellent chance of doing just that. No magic required.