This term seems to have originated in early baseball or cricket, referring to a ball that travels low across the ground – either a cricket bowl or a baseball hit. Presumeably, the name comes from the idea that the ball was low enough to “cut daisies” as it traveled.
From there, it morphed into munitions. A fuse was developed that allowed bombs to explode just before they hit the ground, which means the blast didn’t get absorbed by the Earth and instead spread out over a larger area. So, like the ball described above, the blast of the bomb skimmed over the top of the ground.
These bombs were often used to clear areas for helicopter landing zones, as they would fell trees in a wide radius. This culminated in the famous BLU-82 bomb used in Vietnam, which was nicknamed “The Dasiy Cutter.”
This video shows the bomb dropped in a forest to clear an area for a helicopter to land.