Paper Tiger

But it still loses to the Scissor Lizard

"In appearance it is very powerful but in reality it is nothing to be afraid of; it is a paper tiger. Outwardly a tiger, it is made of paper, unable to withstand the wind and the rain."

—Mao Zedong

Subtrope of More Than Meets the Eye. A character is not as tough as their physical appearance and/or personality suggests. Basically the opposite of Hidden Badass.

Paper tiger is a literal English translation of a Chinese phrase, meaning something that seems as threatening as a tiger, but is really harmless. This Chinese colloquialism is similar to the English phrase "its bark is worse than its bite".

The phrase is an ancient one in Chinese culture, but sources differ as to when it entered the English vocabulary. It is found translated to English as early as 1836, in a work by John Francis Davis.

This usually falls under the following subtropes:

Face of a Thug Because Good Is Impotent in fiction, they are likely to be this.
Fake Ultimate Hero or Big Bad Wannabe If they are supposed to to be a mighty hero or a formidable villain respectively.
Fake Ultimate Mook If they are in a video game, then they're probably one of these. The Anticlimax Boss is likely to be this as well.
Miles Gloriosus or Small Name, Big Ego If they brag about being a badass but are not really one.

Contrast this to Badass on Paper, where the character isn't very impressive in person but actually performed all the impressive feats that are the basis for his or her reputation, Mugging the Monster for the complete opposite (finding that a weak looking individual is much more dangerous than they seem) and the Worf Effect, as it seems that this applies to the Worf him/herself in context, whereas Worf Effect refers to the over-arching phenomenon of "stock 'tough' character handed ass by tougher one."

Examples of Paper Tiger include:

Anime

Bellamy the Hyena in One Piece bullies other pirates on the island of Jaya and has spring-based powers with enough concussive force to destroy buildings. Protagonist Monkey D. Luffy and his first mate Roronoa Zoro let themselves get beat up by him under the idea that he has not wronged them. Once he does, however, Luffy challenges him, and Bellamy gets stopped cold with a single punch.

Film

The Wizard of Oz (1939). When the Cowardly Lion first appears he acts in an aggressive manner, charging the group and challenging them to a fight. When he tries to attack Toto, Dorothy smacks him on the nose and he starts crying. Granted, the Cowardly Lion also turns out to be a Crouching Moron, Hidden Badass later on.
In The Naked Gun, the one of the members of the council of evil calls America "a paper tiger."

Literature

Hagrid in the Harry Potter series, as well as his boarhound, Fang.

Live Action TV

Osten Taylor from Survivor: Pearl Islands was a buff bodybuilder who had absolutely no idea how to rough it out in nature, almost drowned in a challenge, became convinced that a pelican was out to get him, and ended up being the first contestant to quit Survivor.

Tabletop RPG

Paranoia supplement Acute Paranoia, adventure "The Harder They Clone". The doorman at a nightclub looks like a character in The Road Warrior: huge, black leather tunic, rippling muscles, and scars. It turns out the PCs can easily kill him since he's unarmed and unarmored.

Video Games

From Tales of Monkey Island, Bugeye is a bald, tattooed pirate who disrespects the main character and generally talks tough. But once you need to get information out of him, you find that the slightest bit of pressure will make him squeal.
Sir Prancelot of Scufflewick from Drakensang: he wears a full plate armor, has a cool winged helmet and wields a large two-handed sword. He's also a complete wimp who won't admit his failures and run away from goblins.

Web Comics

In Minion, Count Antonie's vampiric powers make it nigh-impossible to kill him...but merely beating him up is a dead easy.
Buck Godot: Zap Gun for Hire had this:

Buck: Amazing what a rep lets you get away with, eh?

Western Animation

From Jimmy Neutron Boy Genius, Nick Dean. He's the ultimate cool dude, the girls all dig him, and he's supposed to be tough. In the movie his part of the plan is to take care of the Big Bad while the others rescue their parents. One look at his competition, though, and he goes screaming like a little girl.
In Avatar: The Last Airbender, Hakoda tries to pick a fight with a tough-looking prison inmate by shoving him, but instead of fighting back the inmate says "that hurt my feelings!"
Dave from Dave the Barbarian. As the Theme Song states, he's "huge, but a wimp".
Johnny Bravo. He's a pretty muscular-looking guy but he's always getting beaten up by the women he flirts with.
Tiger in Skunk Fu!! Formerly a powerful warrior, after losing to Dragon, he's become a cowering wimp.