This phrase refers to passing signals to convey a message. This signal can be subtle for those who want to understand it.
It began as a reference to giving signals for an act that is illegal or considered immoral but is now a common phenomenon to pass on jokes between friends.
She wanted to go for the late night party so her friend made up a story about them getting together to study. Funny thing is that she had not said anything to her friend but a nod is as good as a wink between friends.
Between siblings, a nod is generally as good as a wink.
There is no origin for this idiom
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definition
Common phrase that has a specific meaning.