Muggles are non-magical people, most of whom are completely unaware of the existence of the wizarding world. The term is usually applied affectionately
Even those Muggles who do notice Porlock droppings or Streeler trails appear satisfied with the flimsiest non-magical explanation
Ah, that’s definitely the Murtlap. You must be particularly susceptible. See, you’re a Muggle. So our physiologies are subtly different
‘It’s real for us,’ said Snape. ‘Not for her. But we’ll get the letter, you and me.’
Harry Potter and the Deathly Hallows
by J.K. Rowling
Mudblood's a really foul name for someone who is Muggle-born - you know, non-magic parents. There are some wizards - like Malfoy's family - who think they're better than everyone else because they're what people call pure-blood.
I never knew all the odd stuff I could do was magic till I got the letter from Hogwarts. My dad’s a milkman, he couldn’t believe it either.