The best place to look is here, http://knowyourmeme.com/memes/owned-pwned
Owned (below: Variations) is a “leetspeak” slang word, derived from
the traditional meaning of the verb “own”, as meaning to appropriate
or conquer to gain ownership. The term strongly implies domination,
severe defeat, and/or humiliation of a rival. For instance, “I owned
the network at MIT” indicates that the speaker had cracked the servers
and had the same root-level privileges that the legitimate owner of
the servers had. It is also now primarily used in the Internet gaming
culture to taunt an opponent who has just been soundly defeated (e.g.,
“You just got pwned!”) and as popular slang, outside of the internet.
It is partly synonymous with a high degree of fail, and while
sometimes these terms have been used interchangeably, it is more
proper to say that someone or something is “fail” if they have been
“owned.”
Edit as per comments.
"P"wned
The “p” in “pwned” alteration within the computer community
has been believed to have have originated from typing too fast on the
standard English QWERTY keyboard, thus missing the “o” and typing “p”
instead. It could also be thought to pay homage to early hackers who
tampered with phone equipment rather than computers--and “pwn” may
simply be following this trend. (e.g., phishing, phreaking) According
to one definition in the UrbanDictionary, the term “pwn” dates back to
the 1960s at M.I.T. It was used competitively by programmers working
on chess AI. When one out programmed the others he would refer to
himself as King and the others as pawns. It started being used on Fido
Net across the BBS world before internet went public, although it was
used on the internet between university’s at the time.