undefined is a constant in ActionScript, which is the default value for undeclared variables, or the value of variables with no assigned value. In Club Penguin, which uses ActionScript, occasionally when certain data is expected, an undefined value is passed, and may be the source for some glitches or other unexpected results.
Many times, this will appear in the form of text that reads "undefined", where a value was dynamically generated, but instead of the wanted text, undefined was returned. For instance, occasionally, in the old buddy list, a glitch could display the names of some of the friends as "undefined". Another former example was when using the "give a tour" chat option in an igloo, the player would say "undefined", due to igloos not having tour messages.
The term also- and most commonly- refers to a situation where an item's icon in the inventory could not be loaded, and is replaced with a big "X" icon. This is the case with most bait or unreleased items, since their icons mostly do not exist, but it can also occur due to loading errors.