Its proponents claim that "The verb 'to Gamify' means to apply game mechanics in everyday applications and situations to boost engagement, fun and good behaviors." Cynics--myself being one--might say it's slapping video game terms onto pre-existing, well-established systems of loyalty schemes and training programs, tossing in achievements and leaderboards then acting as if you've done something profound and world-changing.
Apparently, it's been predicted that gamification will be a $1 billion market by 2015. People, I have faith in the world and trust in you. Please don't let this happen.
Of course, it's all about Cowclickification now anyway.