The original meaning of the word as I first heard it back in the late 1990s was to refer to the vast majority of "normal" people who don't have an interest in or deep understanding of technology and internet culture.
I don't think it was originally meant as an insult, but more as an acknowledgement and reminder to ourselves that the things we were into and cared about were a niche thing and not exactly the norm.
Nowadays, I've heard it applied to just about any niche interest or hobby, for example: people who are not into mechanical keyboards would also be "normies", and worse it's being thrown around as a direct insult to people, in the same vein as calling someone "basic".