The Collaborative International Dictionary of English v.0.48:

Shag \Shag\, a.
   Hairy; shaggy. --Shak.
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The Collaborative International Dictionary of English v.0.48:

Shag \Shag\, v. t. [imp. & p. p. Shagged; p. pr. & vb. n.
   Shagging.]
   To make hairy or shaggy; hence, to make rough.
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         Shag the green zone that bounds the boreal skies. --J.
                                                  Barlow.
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The Collaborative International Dictionary of English v.0.48:

Shag \Shag\, n. [AS. sceacga a bush of hair; akin to Icel. skegg
   the beard, Sw. sk[aum]gg, Dan. skj?g. Cf. Schock of hair.]
   1. Coarse hair or nap; rough, woolly hair.
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            True Witney broadcloth, with its shag unshorn.
                                                  --Gay.
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   2. A kind of cloth having a long, coarse nap.
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   3. (Com.) A kind of prepared tobacco cut fine.
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   4. (Zool.) Any species of cormorant.
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WordNet (r) 3.0 (2006):

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 for sexual intercourse [syn: fuck, fucking,
       screw, screwing, ass, nooky, nookie, piece of
       ass, piece of tail, roll in the hay, shag, shtup]
    5: a lively dance step consisting of hopping on each foot in
       turn
    v 1: dance the shag

Moby Thesaurus II by Grady Ward, 1.0:

77 Moby Thesaurus words for "shag":
   Burley, Cuban, Havana, Havana seed, Latakia, Maryland, Russian,
   Turkish, Virginia, bright, bring, bring back, bristle, call for,
   canaster, capillament, chase after, cilium, coat, crop, feel,
   fetch, fetch and carry, finish, fleece, flue-cured, fur, get,
   go after, go and get, go fetch, go for, go get, go to get, grain,
   granular texture, hair, head, head of hair, horsehair, indentation,
   knub, leaf, locks, lugs, mane, mat, mop, nap, nub, obtain, pelt,
   pick up, pile, pit, plug tobacco, pock, procure, protuberance,
   pubescence, pubic hair, retrieve, run after, seconds, secure,
   setula, shock, structure, surface, surface texture, texture,
   thatch, tresses, wale, weave, woof, wool