The Jargon File (version 4.4.7, 29 Dec 2003):

muggle


    [from J.K. Rowling's Harry Potter books, 1998] A non-wizard. Not as
    disparaging as luser; implies vague pity rather than contempt. In the
    universe of Rowling's enormously (and deservedly) popular children's
    series, muggles and wizards inhabit the same modern world, but each group
    is ignorant of the commonplaces of the others' existence ? most muggles are
    unaware that wizards exist, and wizards (used to magical ways of doing
    everything) are perplexed and fascinated by muggle artifacts.

    In retrospect it seems completely inevitable that hackers would adopt this
    metaphor, and in hacker usage it readily forms compounds such as
    muggle-friendly. Compare luser, mundane, chainik, newbie.