Lugging an engine means putting the engine under heavy load by operating it at low rpm while the transmission is in a higher gear than needed to maintain proper rpm. Or staying in OD when you should be in forth, third or even second. Lugging can stress pistons, rings, etc and melt them due to the high EGT's.
If the engine can not increase rpm by throttle your lugging the engine if the rpm is low. So, your in 6th gear, the engine will not go above 1500 rpm or 1600 rpm with the pedal on the floor, the EGT will increase very quickly. The engine needs to stay above the peak torque with enough RPM to keep EGT in a safe range.
P. S. The 48RE will stay in OD a bit longer than I like on some hills. I find myself locking out OD to keep the rpms up. My auto will lug down to 1400 and stay there while loosing speed with the cruise on. I shift down at 1800 rpm on the highway. I like 2000 to 2100 rpm while pulling in OD.