This one was inspired by a couple of Christmas gifts I got for my nephews. I had sometimes brought over my copies of Munchkin and Munchkin Impossible to family gatherings, and they seemed to get a kick out of it, so I got them their own Munchkin games: Munchkin Fu and Star Munchkin.
Wait a second! These aren't the friendly Munchkins that Dorothy meets when she first arrives in the Land of Oz. What happened here?
While L. Frank Baum did certainly invent the term, Steve Jackson is actually having fun with a use of the word as it is used by gamers. It entered gaming slang as a quick way of saying "This is a character my kid brother would play" or "This guy plays like my kid brother." Who hasn't called one of their younger relations "the little Munchkin"?
Because when you're young, there are many aspects of an RPG that are hard to get. Especially since older versions of D&D could seem like they're played on a game board (remember that D&D started life as a miniatures wargame, so a grid-based map and miniatures were very common props), younger players would often import ideas from other board games, like the need to win or compete with other players, which would conflict with the new medium, which was much more cooperative. So these "munchkin" players focused on "winning" the game, which in those days meant killing the most monsters, gathering the most loot and trying to maximize their ability to do those things.
The word grew into a general insult, as people tended to refer to anyone who played in a manner they didn't like or weren't used to as a "munchkin".
So now that there's an upcoming Oz RPG, will there be munchkins in Munchkinland? It's possible. I actually designed the fighting rules to be rather unsatisfying to that sort of player. Nobody dies in Oz, so no amount of damage will result in a kill. You can inflict permanent consequences on an opponent by cutting off body parts, but once you cut off a fellows arms and one leg, he'll be hopping away as fast as his remaining leg will carry him. He might even head to the nearest tinsmith to obtain harder-to-damage replacements.
And the way to advance in the game is not by fighting, but by helping other people and making friends. While some fights might come up, they are not the focus of play. If there is such a thing as a "power build" character it would actually be a high Presence build, probably based on the Noble template. The ability to demand a surrender before an opponent has had their Wits score reduced is significant. High Presence skill means that you're fun at parties, too.
At one time, I thought it might be fun to come up with a community in the Munchkin Country to make fun of all the gaming cliches out there, but after over 30 years, there's simply too much. To get an idea, check out the webcomics Order of the Stick, DM of the Rings and Nodwick. All very funny stuff.