1. money that the government declares to be legal tender although it cannot be converted into standard specie;
The Collaborative International Dictionary of English v.0.48:
Fiat \Fi"at\, n. [L., let it be done, 3d pers. sing., subj.
pres., fr. fieri, used as pass. of facere to make. Cf. Be.]
1. An authoritative command or order to do something; an
His fiat laid the corner stone. --Willis.
2. (Eng. Law)
(a) A warrant of a judge for certain processes.
(b) An authority for certain proceedings given by the Lord
Fiat money, irredeemable paper currency, not resting on a
specie basis, but deriving its purchasing power from the
declaratory fiat of the government issuing it.
WordNet (r) 3.0 (2006):
n 1: money that the government declares to be legal tender
although it cannot be converted into standard specie