How does paper wallet work?
Determine your private key. Write it down on a piece of paper. Done.
It'll 'work' for as long as you keep it hidden from prying eyes, and are still able to read what is written on the paper.
The term has been generalized to convey the concept of affixing a private key - in visible alphanumeric form - upon any tangible medium by any means (e.g., stamped into metal).