The Collaborative International Dictionary of English v.0.48:

Peat \Peat\, n. [Prob. for beat, prop., material used to make
   the fire burn better, fr. AS. b[=e]tan to better, mend (a
   fire), b[=o]t advantage. See Better, Boot advantage.]
   A substance of vegetable origin, consisting of roots and
   fibers, moss, etc., in various stages of decomposition, and
   found, as a kind of turf or bog, usually in low situations,
   where it is always more or less saturated with water. It is
   often dried and used for fuel.
   [1913 Webster]

   Peat bog, a bog containing peat; also, peat as it occurs in
      such places; peat moss.

   Peat moss.
   (a) The plants which, when decomposed, become peat.
   (b) A fen producing peat.
   (c) (Bot.) Moss of the genus Sphagnum, which often grows
       abundantly in boggy or peaty places.

   Peat reek, the reek or smoke of peat; hence, also, the
      peculiar flavor given to whisky by being distilled with
      peat as fuel. [Scot.]
      [1913 Webster]