The term is used in contrast with the use of a spark gap to initiate a damped sinusoidal wave in a tuned circuit consisting of an inductor and capacitor. The energy in this circuit constantly changes between the capacitor's electrostatic field and the inductor's magnetic field. The energy is then coupled to the radiating antenna, loosely (so as not to dampen the wave too quickly).
Some radio amateurs understand "CW" to mean transmission by means a single frequency signal which is either on or off (e.g. Morse code), as opposed to a carrier which varies continuously in amplitude, frequency or phase. Some would even call the former "unmodulated" even though turning on and off is actually the most extreme form of amplitude modulation.