IPA: /ˈsnʌɡli/
KK: /snʌɡli/
In a way that is tight and comfortable, allowing little space to move.
The cat curled up snugly in the warm blanket.
Snugly is formed from "snug" (from Old Norse "snuggr", meaning snug or comfortable) and the suffix "-ly" (meaning in a manner of). The word "snugly" means in a manner that is comfortable or cozy.
Think of being in a 'comfortable' ('snug') way — the '-ly' just means how you are. So, snugly means being cozy in that manner.