Seems to be a UK English usage. A snagging list details the outstanding and remedial work as a construction scheme comes to an end. Sometime the final stage payment is conditional on rectifying the items on the list.
There are always things that we miss. The building industry has known this for a while – towards the end of a construction project, a snagging list is drawn up to detail all those little mistakes that have been made, or damage that has been done inadvertently.
More and more of us tend to slice our functionality up in terms of discrete chunks – whether or not we call it use cases or stories. Stories especially with their focus on delivering value are normally vertical slices through the system – from user interface, to back-end integration and beyond. As such sometimes the horizontal aspects (the most visible of which being the user interface) can sometimes have gaps, defects, and can even be more vulnerable to regression bugs as functional testing will focus along vertical, story lines.
In the building industry, architects draw up the snagging list – and the builders then start the process of “making good” – fixing the items on the list. I feel that a similar, formal process should be required prior to the delivery of any user-facing deliverable, but instead of the architect a developer and client should review all screens drawing up a list of defects. This snagging list can then be prioritised just like any other piece of development, and the work divided up amongst any available development resource.