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Moe (萌え pronounced mo-EH) is a term used in Japanese anime and manga to describe a genre of shows featuring an "ideal girl." Literally, is more often used to describe a particular emotion a character's appearance and behavior invokes to her audience. More derisively, the term is used with the implication a character is as cute and non-threatening as possible while still being presented in a realistic sense, with the implication the intended audience is incapable of dealing with actual complex females.
The term's origin is not known. Some say it stems from a name of an anime heroine. Others believe that it was a wordplay of "Moeru" (燃える), literally meaning "to burn," but figuratively interpreted "to be madly in love."
The moe genre usually contains female characters not yet of adult age, or someone younger than the main character who is usually a male. There are dozens of characteristics that make a "moe" character but some characteristics make others consider her "un-Moe." They are often contradictory and are dependent on personal viewpoints. For example, some fans argue moe characters should be cutesy and feminine, while others argue a cute character who acts in a tough or tomboyish character is also adorable. Moe characters typify the concept of kawaii.
"Moe" is often confused or even equalised with borderline rorikon but for many fans there is a subtle yet distinct line that separate them. To many moe-loyalists, the point is on supporting and watching rather than to imagine being actively "involved" (literally and sexually) with the character. Their position is like that of an protective elder brother to a younger sister. Contributing to this is another main characterstic of many moe character: 'purity' from carnal activities.
Some that study "Moe" have pointed out similarities between "Moe" and "idol craze" of 70s and 80s where an "ordinally" but cute girl would come out of nowhere to become a popular singer. Other have gone even further back refering back to The Tale of Genji and its writer Murasaki Shikibu. The character of Onna Sanno Miya (女三の宮) already has the several distinctive characteristics of "Moe" like girlish look, childish behavior, a lack of common sense, and a noble upbringing.
"Moe!" is also used within anime fandom, and even in some anime, as an interjection or exclamation referring to a character the speaker considers moe, somewhat like a male version of the fangirl "Squee!"