A transferred epithet is an epithet - usually an adjective - which is applied, in a grammatical sense, to a noun which is not actually the one which it is describing. When a melodramatic writer says, for example, about the place where a murder has been committed, "What a vicious scene!" the epithet 'vicious' has been transferred from the person who has shown vice - the murderer - to the place, which in real life has no ability to be vicious.
In a more everyday use, the sign Disabled toilet is now to be seen often. It is, of course, a transferred epithet: if it were the toilet that was disabled, no one would want to (or perhaps be able to) use it. No; it is a toilet designed to be used by disabled people.