Recently a client asked during a pitch meeting, while discussing the project warranty, if we could explain to them why a defect is called a bug. They were curious if it was because it was friendlier than calling it an error.
So why is a defect or error called a bug?
The term bug gained popularity in the technical community back in the 1940's. In September 1945 the Harvard Mark II Aiken Relay Calculator (https://en.wikipedia.org/wiki/Harvard_Mark_II) was producing incorrect results. When the technicians opened up the machine they found a moth stuck inside the computer, the moth was causing the fault and this started the trend of describing faults as bugs and resolving faults as debugging.

The log entry from the Mark II, with a moth taped to the page
However, using the term bug to describe a fault or issue pre-dates this occurrence, which the technicians hint at in their report "First actual case of a bug being found". One of the first actual recorded uses of the term was in 1878 by Thomas Edison:
It has been just so in all of my inventions. The first step is an intuition, and comes with a burst, then difficulties arise-this thing gives out and [it is] then that "Bugs"-as such little faults and difficulties are called-show themselves and months of intense watching, study and labor are requisite before commercial success or failure is certainly reached.