Pencil-and-paper (also called pen-and-paper or PnP) refers to the regular (non-computer) Dungeons & Dragons game. The term refers to the ancient tools that were available to early roleplaying humankind. The "pencil" was a long piece of wood that contained a soft, staining, carbon-based material called graphite encased inside. Early roleplaying humans would scrape the "pencil" across the surface of "paper". "Paper" was the term used to describe an early form of random access memory, consisting of pressed tree pulp that was smooth and designed to easily absorb the scrapings of pencil graphite.
These pen and paper implements were eventually replaced by computer-driven input consoles running applications like Neverwinter Nights.