Wow. I can't believe no-one around here knew that.
MUD stands for Multi-User Domain
Although I wouldn't define MUD in the way you have.
MUDS started in the early days of text-based internet.
Sort of like Dungeons & Dragons, only people would use BB's (Bulletin Boards) similar to this type that you are reading/using at funtrivia. There are still groups dedicated to maintaining and playing MUDs out there to this day. We call them "hard-core" RPGers.
hope that helped