A hag (or crone) is a kind of malevolent, wizened old woman often found in folklore and children's tales such as Hansel and Gretel. A hag is essentially a witch without any magical powers.
In the Dungeons & Dragons game, "hags" are three races of female creatures, sort of female counterparts to ogres. They are the annis (named from an analogous creature from the British folklore), the green hag (a green-skinned version of the Slavic Baba Yaga), and the sea hag (sort of a sea witch, not a mermaid). All three sorts are evil, but not overly powerful.