According to urbandictionary.com, negging is a type of low grade insult meant to undermine the self-confidence of a woman so she might be more vulnerable to a male's advances.
Male: "Say girl, your nose is flat as a button...haha...it's so cute"
Female is now feeling quite self-conscious and confused. Her reality is shaken because she can't believe someone just insulted her. She then has the innate desire to seduce him, she succeeds according to plan, the guy wins.
Let's not ever forget though that negging is a LOW GRADE way to get a lady's attention, regardless of how successful a guy may be at getting laid with the technique.
However, besides male-female interaction, I find that females also 'neg' other females.
Female #1: "OMG! That girl is so prettyy!!"
Female # 2: "Yeah, but her legs are short."
Female #1: "Um..okay? She's still pretty!"
Obviously, females aren't negging to make advances on other females, not the straight ones at least. Females neg other females in attempt of lowering the self-confidence of the opposing female. Basically, she is trying to level out with the other female. Hence, negging typically occurs when one female subconsciously thinks the other female is better than her so she has to neg to lower that female to her level. I've seen guys neg other guys too, it usually comes from an insecure place.
Well recently, I've been called crazy, weird, average jane, simple, boring, the list goes on. I honestly never knew how malicious females can be. One of my girlfriends blatantly tried to make me look promiscuous in front of other guys.
I'm not saying all females are like this. I also have girlfriends that are supportive and loving, never once said anything negative about me. These are the type of friends I intend to keep. This is a good learning experience for me nonetheless. I know to run if I ever catch another girl negging at me.