Throughout much of the country it is a common name for these little bugs (actually isopod crustaceans) that curl up into a ball when disturbed:
http://www.flickr.com/photos/fixersphotos/3452755249/

Other people use the term to describe a wide range of pastries and sandwich wraps that are rolled before slicing:
http://www.flickr.com/photos/rosendahl/3123900711/

There is even a British Dessert called "Jam Roly-poly" that consists of suet pudding being spread flat, covered in jelly, rolled up like in the above image and then cooked.
Source(s):
http://en.wikipedia.org/wiki/Roly_poly


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