During the 1960s the term underground acquired a new meaning in that it referred to members of the so-called counterculture, i.e. those people who did not necessarily conform to the mainstream of human experience such as e.g. hippies.
Terry Anderson describes the early 1970s high point of the utopia of counterculture in his book The Movement and The Sixties:
"Liberal cities turned exotic as freaks and ethnics created a hip cultural renaissance. Street art flourished; color flooded the nation. Chicanos painted murals at high schools and 'walls of fire' on buildings. Black men wore jumbo Afros and the women sported vivid African dress. Young men with shaved heads and robes beat tambourines and chanted on corners, 'Krishna, Krishna, Hare Krishna.' Hip capitalists invaded the streets, setting up shops: Artisans wearing bandanas and bellbottom sold jewelry, bells, and leather, as sunlight streamed through cut glass. Communards in ragged bib overalls sold loaves of whole-wheat bread at co-ops and organically grown vegetables at farmers' markets. Freak flags flew, curling, waving across America. Carpenters wearing ponytails moved into decaying neighborhoods, paint and lumber in hand, and began urban homesteading. Longhairs blew bubbles or lofted frisbees in the park. Tribes of young men and women skinny-dipped at beaches and hippie hollows. A New America, or something new, was emerging." (Anderson 1995, p. 357)
Applied to the arts, the term underground typically means artists that are not corporately sponsored and don't generally want to be.
Underground comics were a sizeable industry in the 1970s, and are still being published today.
It can also mean that something is really groundbreaking and therefore is not mainstream.
Perhaps the best way to define it is a quote by Frank Zappa:
"The mainstream comes to you, but you have to go to the underground."
An alternate usage of the term "underground" is in reference to something that is illegal or so controversial that it would be dangerous for it to be publicized. Or it's so controversial (as in, offensive to societal norms) that it will never be mainstream. Some authors/artists use this as a badge of pride.
Examples:
An underground club might have illicit drugs readily available.
A movie is banned because people might imitate the actions of the characters.
In Sociology, the term counterculture refers to any subculture or group whose values and norms are in opposition to those of the main culture. In this sense, the Mafia, street gangs, and the Amish, as well as hippies are all countercultures in the United States.
