The past decade or so has seen a major change in anime (and in turn manga and Japanese games as well). At the centre of this change is one word: "moé". If you are into anime at all, you have likely heard the term (and if you're on the internet, probably as a pejorative). But what exactly is moé?
Sadly, there is a lot of confusion around this question. Moé critics see moé as everything from a shift in art style to the championing of pseudo-pedophilia due to the over-sexualization of young looking girls in modern anime. However, when it comes down to it, the actual meaning of "moé" couldn't be more different.
Moé (萌え) in its most literal sense means "budding" as the word "moeru" (萌える) means "to bud or sprout" as in, say, a flower. Though it should be noted that, for our purposes, it also can carry the meaning of "burning" (燃え) due to a sort of pun as that word is also pronounced "moé".
However, moé, as it relates to anime isn't a reference to either flowers or fire. Rather it is used in regards to pre-adolescent girls (though it can be applied to boys as well) who are on the cusp of adulthood -- "budding" if you will.
This is where the confusion surrounding moé comes in. How do you know which characters are moé and which aren't?
Simply put, "moé" is a subjective, not an objective, term. Moé is simply the feeling that you personally experience when you see these young characters -- a "budding" (or "burning") feeling of love stemming from the need to protect and/or revel in the innocence of these children/child-like characters. Because of this, there is no such thing as a "moé character," just a character that elicits a moé reaction in you. Or as Patrick W. Galbraith, the man who wrote the book on moé (or at least a book on moé) told Kotaku:
Moé is situated in those [people] responding to a character. Nothing is moé in and of itself, because we cannot predict what will trigger the response in a person.
Of course, as moé culture has become popular -- not to mention lucrative -- more and more anime/manga/game companies have attempted to manufacture characters which elicit the "moé" response in their consumers.
By definition, the moé reaction is a pure, almost brotherly emotional response -- with no erotic undertones. These days, however, there is no doubt that moé designs are combined with overt sexuality in many anime.
And for the staying power of moé, while perhaps not as prevalent as in recent years, large swaths of anime each season (not to mention Japanese games) still attempt to pander to the moé-loving demographic -- a trend with no end in sight.
So love it or hate it, now you at least know to how tell if something is moé or not.