Source : Webster's Revised Unabridged Dictionary (1913)

Shag \Shag\, n. [AS. sceacga a bush of hair; akin to Icel. skegg
   the beard, Sw. sk["a]gg, Dan. skj?g. Cf. {Schock} of hair.]
   1. Coarse hair or nap; rough, woolly hair.

            True Witney broadcloth, with its shag unshorn.
                                                  --Gay.

   2. A kind of cloth having a long, coarse nap.

   3. (Com.) A kind of prepared tobacco cut fine.

   4. (Zo["o]l.) Any species of cormorant.

Shag \Shag\, a.
   Hairy; shaggy. --Shak.

Shag \Shag\, v. t. [imp. & p. p. {Shagged}; p. pr. & vb. n.
   {Shagging}.]
   To make hairy or shaggy; hence, to make rough.

         Shag the green zone that bounds the boreal skies. --J.
                                                  Barlow.

Source : WordNet®

shag
     n 1: a strong coarse tobacco that has been shredded
     2: a matted tangle of hair or fiber; "the dog's woolly shag"
     3: a fabric with long coarse nap; "he bought a shag rug"
     4: slang terms for sexual intercourse [syn: {fuck}, {fucking},
        {screw}, {screwing}, {ass}, {nooky}, {nookie}, {piece of
        ass}, {piece of tail}, {roll in the hay}, {shtup}]
     5: a lively dance step consisting of hopping on each foot in
        turn
     [also: {shagging}, {shagged}]

shag
     v : dance the shag
     [also: {shagging}, {shagged}]