It has nothing to do with speed of focus (as some people try to say) as the term was used way before auto focus was even thought about.
The lower number the f/ stop = the wider the aperture = faster the lens.
So there is a relationship between the shutter speed and the aperture, therefore an f/1.2 will allow you a faster shutter speed in identical lighting conditions than an f/2.8, ergo the lens is faster.
(that is my take on it anyway
)<< EDIT >> Jon, I did not see your reply before I posted this, it's good to see that we are in agreement, even down to the dating of the term

There are fast-focusing lenses, although a fast lens does not necessarily refer to its focusing speed, as has already been explained. Also, it should be noted that an 85 f/1.2L and a 400 f/5.6 L are equally fast when thrown off a tall building. They will both have a velocity of 32 ft/sec for as long as they fall, and will fall a distance of 16 ft/sec^2 in that time. 
Personal observation:
If you list an 85 f/1.2L for sale in the POTN classifieds, it will sell much faster than a 180 f/3.5L Macro.







