The story
Suggests that the speaker is nudging, and winking at, the person to whom the term is directed. Popularized by the Monty Python sketch "Candid Photography" (better known as Nudge Nudge).
Etymology from Wiktionary, CC BY-SA 4.0.
nudge nudge wink wink
Today it means: A phrase used to hint that the speaker is euphemistically referring to something else. Full definition →