|There is more information available on this subject at Frag on the English Wikipedia.|
Frag is a term from the Vietnam War, most commonly meaning to assassinate an unpopular member of one's own fighting unit by dropping a fragmentation grenade into the victim's tent at night or rolling it into the bathroom when they're on the toilet. A hand grenade was used because it would not leave any fingerprints, and because a ballistics test could not be done (as it could to match a bullet with a firearm). A fragged victim could also be killed by intentional friendly fire during combat. In either case, the death would be blamed on the enemy, and, due to the dead man's unpopularity, no one would contradict the cover story. The intended victim of a fragging was sometimes given warnings, of which the first might be a grenade pin on the sheet of the victim, and later on, a tear gas grenade.
In Halo a "frag" also called "fragged", usually indicates a grenade or a kill by a grenade, typically one for which the player scores a kill in a deathmatch.
This term could conceivably be used for a teamkill or any kill whatsoever.