This term was coined by Damon Knight.
In science fiction writing terminiology, to "Call a rabbit a smerp" is to take some mundane object and give it a weird name to make it sound 'science fictiony.' This is also known as creating a neologisms. This is widely regarded by most SF/Fantasy writers as A Bad Thing and is Not To Be Done, since it's really just laziness on the part of the writer.
Generally, renaming a mundane object, like a horse, a rabbit or a loaf of bread, is considered acceptable *if* that horse/rabbit/loaf of bread is significantly different from a normal horse/rabbit/bread. For example, if the horses on your world have six legs and are green, you're within your rights to call them "Esrohs" or "hroses" since they're not your everyday normal horses.
You can also make slight variations to your horse/rabbit/loaf of bread and give it a name that reflects that, like calling a rabbit a "New Haven Portly" or a horse a "Desert Strider" or bread "Bean Break.' This gives the fictional creation a little life of its own without completely stretching credibility and without tacking on a silly, made up name that doesn't tell the reader anything interesting about the object.