Wort means "word" and Klauberei is a noun derived form the verb klauben—to carefully pick over or sort out something (not to be confused with glauben—to believe). The verb is neutral in its connotations, but Wortklauberei is decidedly not: It stands for a pedantically narrow interpretation of a word or expression, conceived in the most literal sense. The nouns referring to people perpetrating Wortklauberei are Wortklauber (masc), Wortklauberin (fem) and Wortklauber (plural); wortklauberisch is the adjective.
Here is an example. A recent New York Times crossword puzzle had as its theme "Where's Waldo?", represented by four theme answers containing different anagrams of WALDO. A crossword blogger complained that these answers did not "hide" Waldo because "he's not hiding so much as he is dismembered...If I accept this puzzle's premise, then the word 'hiding' just loses all meaning." I consider this Wortklauberei: If the name "Waldo" would appear unchanged in the answers, it would not be hidden, but visible in plain sight—in the realm of words, where crossword puzzles reside, anagramming a name is an elegant way of hiding it, to me at least.
Here's another, more substantive example: Article 1(1) of the German Constitution (Grundgesetz—Basic Law) declares
Die Würde des Menschen ist unantastbar. Sie zu achten und zu schützen ist Verpflichtung aller staatlichen Gewalt. (The dignity of a human being is inviolable [literally, "untouchable"]. To respect and to protect it is the duty of all powers of the state.).I've heard remarks to the effect that these two sentences contain a contradiction: If human dignity is inviolable, it does not need protection. Really? If an area is off-limits, doesn't it need protection nevertheless, or rather, because of it? The same is true for Article 1(1): Its intent is clear enough, and I find it wortklauberisch, and annoyingly so, to take the authors of the article to task for the language they used.