What It Stands For
F.L.U.T.T. stands for Freaky Losers Use This Thing. This abbreviation is not approved by many parents since it uses a naughty word (thing) and some complained, so Nintendo changed the name to F.L.U.D.D. (Flash Liquidizer Ultra Dousing Device). This name was better.
F.L.U.T.T. was invented by Prof. E. Gadd one day and became popular when Mario and Bowser Jr. used it in a friendly squirt gun fight (which many mistook for a serious evil battle over Princess Peach). Nintendo later released these squirt guns into stores and many kids began playing with them.
3 years after F.L.U.T.T. was released, many parents began noticing that F.L.U.T.T. was not spraying water, but actually sulfuric acid! Nintendo, faced with several lawsuits, pulled the guns from the shelves.