Green’s Dictionary of Slang

towel n.

[abbr. oaken towel n.]

a cudgel.

Taffy’s Progress to London 2: By the great Cadwalladar hur cou’d fain in hur Heart to lay hur Country-man’s Towel about hur for hur Sarciness.
[UK]W. Toldervy Hist. of the Two Orphans IV 132: They followed, and gave Humphry, not withstanding his strong towel, two or three bloody strokes upon the head and shoulders.
Advice to the Officers of the British Army 115: Do not fail to exercise your rattan on the drummers [...] it may save your own shoulders from being rubbed over by the adjutant’s towel.
[UK]Egan ‘The Bould Yeoman’ in Farmer Musa Pedestris (1896) 137: The High-pad quickly cut the farmer’s towel in twain – / Pulled out his barking-iron to send daylight through his brain.
[US]Monteleone Criminal Sl. (rev. edn).

SE in slang uses

In compounds

towel-head (n.) (also teatowel-head, towlie) [SE towel + -head sfx (2)/SE head; the term became particularly popular during and after the Gulf War of 1991]

a derog. term for an Arab from the Middle East.

[Aus]B. Humphries Traveller’s Tool 106: I’m here to tell you that those old teatowel-heads know how to make it uphill work.
[Aus]R.G. Barrett White Shoes 163: Forget about what those fuckin’ tea-towel-heads did to old Brumby.
[UK]Indep. Rev. 27 Sept. 5: I’m not sure that ‘Operation Divine Towelhead-Blast’ will be all that helpful, George.
The Apollonian Press ‘American Israelis & Palestinians at Odds’ Country Joe’s Place [Internet] Said fellow Jewie Steven Kalifowitivdz: ‘Israel has never been an aggressor in this conflict; it has only over-reacted in typical pre-programmed, Hebrew, teeny-bopper manner to aggressions from the Towlies.’. 1 Apr. [Internet] As you know, I do not hate all towelheads. I recognize that one or two of them aren’t genocidal killers bent on world domination.
[US]J. Díaz This Is How You Lose Her 186: [of a Dominican] A Jeep roars past; the driver calls you a fucking towelhead.
towel-tugger (n.)

(Aus.) a childish person, a weakling.

[Aus]T. Winton Human Torpedo 113: How many of you can surf, eh? [...] Come on — who out of you farm boys and towel tuggers has got anythin’ to brag about?

In phrases

throw in the towel (v.) [boxing use, whereby a towel or sponge thrown into the ring indicates the retirement of a fighter who is losing badly; note earlier at chuck up the sponge under sponge n.]

1. (also chuck in…, sling in..., shoot in..., throw in the marble, ...the rag, throw the towel in, chuck…) to give in, to capitulate.

[[Aus]Sydney Sportsman (Surry Hills, NSW) 2 July 2/7: Seeing there was no further hope for Ross, Con Regan skied the diaper].
[Aus]Bulletin (Sydney) 1 Dec. 15/3: The issue hung in the balance for long, but slowly the meat ants got the upper hand [...], and towards sundown there wasn’t one black ant to chuck the towel in.
[UK]Wodehouse Clicking of Cuthbert 8: Never since his first entrance into intellectual circles had Cuthbert Banks come nearer to throwing in the towel.
[UK]Wodehouse Inimitable Jeeves 169: He had found the going too hard and had chucked in the towel.
[Aus]G.H. Lawson Dict. of Aus. Words And Terms [Internet] THROW IN THE MARBLE — To relinquish.
[US]A.J. Barr Let Tomorrow Come 159: I’m not goin’ in. Throw in the rag.
[US]D. Parker ‘The Little Hours’ in Parker (1943) 114: I throw in the towel right now. I know when I’m licked.
[UK]F. Anthony ‘Winter Feeding the Herd’ in Me And Gus (1977) 82: I know why I’m a bachelor; it’s because I got disheartened and slung in the towel.
[US]B. Schulberg Harder They Fall (1971) 136: I know when I’m licked, chum. I’m throwing in the towel.
[US]‘William Lee’ Junkie (1966) 37: Roy decided to throw in the towel and go to Riker’s Island for the ‘thirty-day cure.’.
[US](con. 1958) R. Farina Been Down So Long (1972) 46: I was ready to throw in the towel when I Tried Taos.
[Aus]J. Alard He Who Shoots Last 225: No, we ain’t got no hope. We better shoot in da towel.
[US]L. Rosten Dear ‘Herm’ 192: I am at my wits ends and ready to say ‘O.K. O.K. I give up!’ and throw in the towel!
[UK]A-Team Storybook 26: The troops on the ground, panicked and confused [...] threw in the towel.
[UK]C. Newland Scholar 250: He was frightened by what he’d seen and was ready to throw the towel in for good.
[US]F.X. Toole Rope Burns 200: The señora was ready to throw in the towel.
[UK]K. Richards Life 431: He threw in the towel [...[ the macho bullshit didn’t mean anything.

2. (also throw the handkerchief) to resign.

[Aus]Bulletin (Sydney) 26 Oct. 14/4: It’s always a dark day in ’Amen Corner’ when a bachelor shepherd ‘throws the handkerchief.’ Last time it happened hereabouts, patriarchs prayerfully ’disciplined’ the meenister, while ewe-lambs of the flock flooded him with tear-blotted anonymous letters.

3. (also throw in the sponge) to die.

[Aus]Bulletin (Sydney) 19 Dec. 16/4: When Bill Smith, trader, of St. Agnin’s (Papua), threw in the towel after a few rounds with fever, the residents of the lonely island decided to purchase a tombstone to commemorate Bill’s virtues.
[US]L. Pound ‘American Euphemisms for Dying’ in AS XI:3 200: Threw in the sponge.
[US]Codella and Bennett Alphaville (2011) 265: Rockets’s overtaxed body has thrown in the towel two years earlier, and he only attended in spirit.