Ermahgerd is an internet meme currently making the rounds. It is essentially an extended series of photos involving an excited person or animal gushing over something trivial... although the point of the meme is usually to highlight (and, perhaps, mock) the expression on the person's/animal's face.
The original Ermahgerd photo was posted on Reddit on March 14th, 2012. It was a photo of a teenage girl holding up a set of Goosebumps books and smiling a very odd smile -- due in part to the poor photo quality, the girl appears to have a severely retracted upper lip and a very small nose, and a striking set of 'evil' eyebrows -- in addition to an unstylish set of pony tails, braces, and an decidedly uncool outfit. Within the day, someone gave her an exaggerated herp derp accent by adding the caption: "Gersberms -- Mah fravrit berks." (Because of this, in the early days this meme was sometimes referred to as 'gersberms' or 'berks'). This post quickly reached the front page of Reddit, and a meme was born. The now mandatory Ermahgerd! (Oh my god!) was added sometime between April and June; sadly, none of the relevant sites have usable search features.
There has been some chatter about whether this meme is making fun of either people with speech impediments or people with Down's Syndrome (or other disabilities), and the general consensus seems to be that it is not. This is somewhat dubious; while the girl in the photo has been (tentatively) identified as an apparently 'perfectly normal' person named Maggie and the accent is probably intended to make fun of the way teenage girls talk, presumably a cross of a Valley girl accent and the mild speech impediment caused by an orthodontic retainer, this does not really address the fact that the average viewer might very well see a picture of a special-needs child talking with a severe speech impediment.
This meme has long passed off of this first photo, though, and now it is just as common, if not more so, to see Ermahgerd animals, dogs, cats, rabbits, and monkeys who are apparently having over-the-top reactions to milk bones, cheeseburgers, carrots, and sticks. The first of these may have been a pug that appeared on the site I can has cheezburger? on June 8th, 2012. Being very cute, these have taken off on sites like Pinterest and Facebook.
The photo meme has continued to evolve in two directions: the original photo photoshopped to include various objects that sound funny when said with and intrusive R ("Ermahgerd! flerp flerps") and animals (sometimes photoshopped) with silly expressions. Although the meme seems to have peaked in August of 2012, it is still going strong.
It has spread in another way as well; comments including 'ermahgerd' or simply 'gerd' are starting to appear frequently on social networking sites (and, presumably, in private communications) to indicate scorn, mockery, and general herp derpiness. It may also be used in a mildly self-deprecating manner, although this is less common. It is quickly joining OMG and derp on the walls of the internet.
References and further reading:
About.com: What is Ermahgerd?