Something raunchy is dirty in one sense or another: it's either literally covered in dirt or suggesting dirty sexual situations.
Raunchy started off as Army Air Corps slang for something sloppy in 1939. But by the 60's the word had grown to imply another kind of dirtiness: the vulgar, sexual kind. So these days it's safe to assume that a raunchy movie, for example, is full of foul language, obscenities, and graphic sex scenes. And in case you're wondering, an R-rated movie is much more likely to be raunchy than a G movie.