A movie that is classified as being pornographic in nature, that is less about a plot, but more about sexual activity.
More of an older term, used to describe a film or movie that was considered to be not for general public viewing, or even for most adults.
Generally derived under the perception that such a movie was contrary to the public morals at the time. Today such movies would barely rate a R rating, let along a XXX one.
The term was derived from the blue pencil used by censors to mark objectionable passages or scenes in films.