In the context of an (MMO)RPG:
1. Usually refers to the casting classes, i.e. the ones that rely on magic instead of melee.
2. Generally the term applies to any character class that delivers more attack damage than, yet will nevertheless lose in a 1 vs 1 fight to, some standard garden-variety warrior.
is a glass cannon's best friend.
Warrior1: Dude, I just killed like 10 wizards, woot.
Warrior2: SFW dude, they're glass cannons, and they had already used up all their spells.