The word smudge is used in magickal circles as both a noun and a verb. As a noun, a smudge is an herb that is burned and made to smoke so as to purify an area. As a verb, to smudge is to purify the area through the use of smoke.
The word smudge describes a specific Native American practice using herbs sacred to those people. Thus, many witches have turned away from the term to use more ethnic-neutral terms like fumigation or purification by smoke.
A more detailed article is entitled smudging