its the slug of metal that comes out of the holes in electrical boxes in the old days they would sometimes work in coin operated machines

at one time the USA didn’t make any of their own coins, they would hire France to make them for the USA. And the USA would let independent mints to make coins if it meet the standards and correct weight of the size (or face value) of the coin minted. Alot were silver,gold, and bronze. The USA even let American Indians make coins up to about 1856, most of their coins were made of gold. But to answer your question some people that traveled around in wagons sell anything they could get people to buy usually gave tokens back for change that was good to buy more merchandise from these people at sometime in the future, these tokens usually were supposed to be worth a nickel. When the wagon moved on they took the real money with them and left the people in the town with the wooden nickels. The name PLUG NICKEL or WOODEN NICKEL both meant worthless nickel.

It’s something that has little or no value, just like a coin with a big hole in it.

when i was younger,a plug nickle meant it wasn’t worth a cent,different eras, different meanings