This is the definition from the book of A History of Magic. This is a book written by Bathilda Bagshot. A Muggle is a person who is born into a non-magical family and is incapable of performing magic to any means and unable to understand magic.

Although though the term is generally associated with Muggle-born (these are witches or wizards that come from non-magic families/Muggles). These wizards or witches believe that Muggle-borns have "stolen" magic and this  rather than legitimate witch craft or wizardry. Most of these happen every other decade entire and they are not normally capable of this. But there must be a wizard in the family not fare down the line.