The Rice University Neologisms Database

To defeat a political opponent in an election by appealing to the masses by portraying oneself as a normal person who will do what is right as opposed to a snobby elitist Reason used: The word was used to describe a political technique in a way that gets a person’s attention. “Out” is used in the sense of doing something in a better way than another person. At first somebody might question why anyone would want to “out-dumb” anybody, but then the context makes the intended meaning of the word clear. The word was probably coined because of its similarity with “outsmart”.