NG

Is like saying:

• sore wa dame それはダメ
  That's not good (don't do that!)

Except not exactly. Everything that's NG is dame, but only a some things called dame are NG.

It's true that NG comes from "not good" in English, but it does not mean the same thing. You can't use NG in Japanese every time you'd say "not good" in English.

Something which is merely "bad" isn't called NG. For example, if a drawing is bad, it's not good, in terms of skill, technique, etc. it's not necessarily NG. The meaning of NG is something that's "not good" to say or do. Something you can't do, that's not allowed. Or that you (or someone else) is not comfortable with.