can mean rough tobacco, or else amateur beach-style dancing in the US. But in the main UK sense, as noun or verb, is an alternative to "fuck" ... but with a slight, important difference of effect. To some ears, "fuck" (like "bang") can sound like an aggressive act, and/or violent conquest, whereas "shag" (a softer sound) sounds more like an enjoyable fun activity. "Shag" is still often the preferred term among women who are very keen on "shagging", very much enjoy shagging men (and/or women) and getting shagged themselves. But don't so much want to get "fucked" (though if talking about another woman, especially a rival, it may well be a different story!). (Note also: "fucking" can also suggest "meddling" or "cheating", "fucked" is also associated with "broken" or "finished", "had it" - "shagged" is used simply to mean "very tired" .... one more reason for the preference by some people for "shag" over "fuck"!)
at a party: "Don't know about you ge-ww, but I need a good stiff shag right away".
Sharon: Yeah, so do I, but steer clear of that Darren, Trace, he just fucks ge-wws an' leaves 'em on their arses!
Tracy (eyes lighting up): Oh yeah? Which one's him then, Shazz?
Sharon (laughs out loud): Come on ge-ww, surely even YOU can do better than DARREN, ya randy