Joshua, besides being called multiuser dialog, you may also hear a MUD referred to as a multiuser dimension, depending on who you're talking to and what that particular MUD's purpose is. The earliest MUD was created in 1980. A MUD gives the user the ability to assume a character in a virtual environment and check out that environment.
MUDs are usually text-based.
The MUD uses text to describe an environment, and MUD clients enter short keyboard commands to control interaction with the MUD server. A MUD is implemented by a MUD server that stores the MUD's world and orchestrates MUD client interactions. Users connect to the MUD using a Telnet or MUD client. Wizards are users who have assumed administrative characteristics in a MUD world.