Nerf is a term that means to be rendered ineffective or less effective by a change in the rules or game system. The term nerf is based on Non-Expanding Recreational Foam, a substance used to make toy weapons. To nerf could be translated as "turn a real weapon into a toy weapon"
Abilities, strategies and encounters, or even entire classes can be nerfed. Despite the frustrated cries of players personally affected by a nerf, such things are usually necessary to protect the integrity of the game balance as a whole.
A "stealth nerf" refers to a change that was not announced by the developers, and was discovered (much to the dismay of the hapless victims) by the players themselves without any advance warning. Players tend to be especially frustrated with stealth nerfs, for obvious reasons.
The opposite of a nerf is a buff. However, "buff" can also refer to a temporary boost in power.