It replaces the older and more refined fannullone, from fare nulla, to not do anything. A fancazzista is someone who doesn't do a damn thing all day, from (non) fare un cazzo (not to do a damn thing.) I encourage you to read my much-admired essay on the word cazzo (one of the most important words in Italian) here.
The practice (so to speak) of these people is called fancazzismo.