From The Collaborative International Dictionary of English v.0.48:
Swag \Swag\, v. i. [imp. & p. p. Swagged; p. pr. & vb. n.
Swagging.] [Cf. Icel. sveggja, sveigja to bend, to sway,
Norw. svaga to sway. See Sway.]
1. To hang or move, as something loose and heavy; to sway; to
swing. [Prov. Eng.]
[1913 Webster]
2. To sink down by its weight; to sag. --Sir H. Wotton.
[1913 Webster]
I swag as a fat person's belly swaggeth as he goeth.
--Palsgrave.
[1913 Webster]
3. To tramp carrying a swag. [Australia]
[Webster 1913 Suppl.]