Literally translated as rotten girl, the original meaning is basically a female fan of yaoi.
The term is more recently being used simply to identify a female otaku, similar to how the western term "fangirl" has grown to be synonymous with girls who write slash fanfiction of their favored series. It should be noted that the concept of "yumejoshi" (an otaku girl that follows heterosexual girl-targeted works like Otome and Teen's Love) also has given rise, though it is much less infamous than its yaoi counterpart.
While the term otaku could be used for males and females, fujoshi specifically identifies females. Male fans of yaoi are called fudanshi instead. The equivalent words for overzealous fans of yuri are himejoshi and himedanshi.