Wit
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Wit is a form of intellectual humour, based on manipulation of concepts; a wit is someone who excels in witty remarks, typically in conversation and spontaneously, since wit carries the connotation of speed of thought. Oscar Wilde and Dorothy Parker have the status of archetypal 19th and 20th century wit — to the extent of having the remarks of others attributed to them. As in the wit of her set, the Algonquin Round Table, witty remarks may be cruel (as in many epigrams), and perhaps more ingenious than funny. A quip is an observation or saying that has some wit but perhaps descends into sarcasm, or otherwise is short of point; a witticism also suggests the diminutive. Wit often suffers on being relayed (you had to be there). Wit is perhaps more characteristic of French and Jewish humour, to give two examples, than of English speakers; though there certainly are identifiable Australian and Irish styles of wit.
Wit in poetry is characteristic of metaphysical poetry as a style, and was prevalent in the time of Shakespeare. It may combine word play with conceptual thinking, as a kind of verbal display requiring attention, without intending to be laugh-aloud funny; in fact wit can be a thin disguise for more poignant feelings that are being versified.
More generally, one's wits are one's intellectual powers of all types. Native wit — meaning the wits with which one is born — is closely synonymous with common sense. To live by one's wits is to be an opportunist, not always of the scrupulous kind. To have one's wits about one is to be alert and capable of quick reasoning.