A raglan sleeve is a type of sleeve whose distinguishing characteristic is to extend in one piece fully to the collar, leaving a diagonal seam from underarm to collarbone. It is popular in sports- and exercise wear, and named after FitzRoy James Henry Somerset, the 1st Baron Raglan, who is said to have worn this style of coat after the loss of his arm in the Battle of Waterloo. These sleeves are often shorter, usually half- or three quarter-length. A Raglan Tee might also be called a baseball shirt.
Source: Oxford English Dictionary Third edition, (2008) online version September 2011. An entry for this word was first included in New English Dictionary, 1903.