The expression skinny dipping has several uses and meanings, though in most cases it is used to refer to going swimming (dipping) naked, or only wearing your skin (skinny).
Other connotations the phrase may carry are having sex underwater; skinny dipping while skinny dipping, or just using underwear substantially as a swimming suit.
Origin of the term
Since humans weren’t always as morally and ethically pure and innocent, as nowadays, skinny dipping has been a widespread practice throughout history… basically everyone who bathed, bathed naked, unless royalty.
Dipping has always been used in English to describe something temporarily plunged into water. The term itself, however had been only born in the 20th century, with the first recorded appearance of it coming from 1947.
Spread of the term
Since its invention, the term had made it into widespread use in the English language, basically used all over the world. Its first Urban Dictionary entry was created in 2003, and several others have been added since.