A euphemism is a word or phrase that is used in place of a disagreeable or offensive term. When a phrase becomes a euphemism, its literal meaning is often pushed aside. In linguistics, the process of coining euphemisms is called taboo deformation.
The methods of historical linguistics can reveal traces of taboo deformations. Several are known to have occurred in Indo-European. Examples include the original Indo-European words for bear (*rktos), wolf (*wlkwos), and deer (originally, hart). In different Indo-European languages, each of these words have difficult etymologies because of taboo deformations--a euphemism was substituted for the original, and the a form of original word no longer occurs in the language. The Germanic word "bear" means "brown guy;" the Slavic root (*medu-ed-) means "honey eater."
Euphemisms can eventually become taboo words themselves through a process for which the linguist Steven Pinker has coined the term euphemism treadmill, which is comparable to Gresham's Law in economics. In this process, over the course of time, a word that was originally adopted as a euphemism acquires all the negative connotations of its referent, and has to be replaced by a substitute. In extreme cases, the process can happen many times, and indeed may still be happening.
Many euphemisms fall into one or more of these categories:
There are two rough opposites of euphemism, dysphemism and cacophemism. The latter is generally used more often in the sense of something deliberately offensive, while the former can be either offensive or merely humorously deprecating.
There is necessarily a lot of subjectivity involved, because connotations easily change over time. Idiot was once a neutral term, and moron a euphemism for it. Negative senses of a word tend to crowd out neutral ones, so the word retarded was pressed into service to replace moron. Now that too is considered rude, and a result, new terms like mentally challenged, special are starting to replace retarded. A similar progression has occurred with reek -> stink -> smell -> odor -> fragrance and crippled -> handicapped -> disabled.